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Economics Part A One mark questions from all the lessons (240 questions) Choose the correct answer. (60 questions, each carry one mark.) The author of wealth definition is : (a) Alfred Marshall b) Lionel Robbins c) Adam Smith d) Samuelson The author of scarcity definition is (a) Adam Smith b) Samuelson c) Alfred Marshall d) Lionel Robbins The concept of Net Economic Welfare has been given by (a) Samuelson b) Marshall c) Adam Smith d) Lionel Robbins Economics is a a) positive science b) normative science c) Both d) none In economics, we make use of a) deductive method b) inductive method c) Both d) none The basic economic problems are common to a) Capitalism b) Socialism c) Mixed economy d) All the above Traditional economy is a a) Subsistence economy b) Market economy c) Command economy d) Monetary economy The basic force that drives the capitalist economy is a) Planning b) Technology c) Government d) Profit motive In a socialist economy, all decisions regarding production and distribution are taken by : a) Market forces b) Central planning authority c) Customs and traditions d) Private sector. Red-tapism and corruption lead to a) Inefficiency of production b) Inequality of income and wealth c) Absence of technology d) Efficient use of resources Necessaries, comforts and luxuries are a) Classification of goods and services b) Classification of wants c) Classification of utility d) None of the above The Indifference curve approach was introduced by a) Alfred Marshall b) Lionel Robbins c) J.R. Hicks and R.G.D. Allen d) Adam Smith Utility is a a) Social concept b) Subjective / psychological concept c) Political concept d) Scientific concept Single commodity consumption mode is a) Production possibility curve b) Law of Equi-marginal utility c) Law of supply d) Law of Diminishing Marginal Utility Consumer surplus is Potential Price Actual Price a) Potential Price Actual Price b) MUn = TUn TUn-1 c) Demand = supply d) None

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Demand for a commodity depends on All the above a) Price of that commodity b) Price of related goods c) Income d) All the above Law of Demand establishes inverse relationship between price and quantity a) inverse relationship between price and quantity b) Positive relationship between price and quantity c) Both d) None Increase in demand is shown by Shifts of the demand a) Movement along the same demand curve b) Shifts of the demand curve c) The highest point on the demand curve d) Lowest point on the demand curve The degree of response of demand to change in price is Price elasticity of demand a) Price elasticity of demand b) Income elasticity of demand c) Cross elasticity of demand d) All the above. Factors determining supply are : a) Production technology b) Prices of factors of production c) Taxes and subsidies d) All the above At the point of equilibrium a) Only one price prevails b) Quantity demanded = quantity supplied c) The demand curve intersects the supply curve d) All the above Above the equilibrium price a. S < D b. S > D c. S = D d. none Changes in quantity demanded occur Only when price changes a. Only when price changes b. Due to change of taste c. both d. None The time element in price analysis was introduced by Alfred Marshall a. J.R. Hicks b. J.M. Keynes c. Alfred Marshall d. J.S. Mill In the long period a. All factors change b. Only variable factor changes c. Only fixed factor changes d. Variable and fixed factors remain constant. Production refers to a. destruction of utility b. creation of utilities c. exchange value d. None The initial supply price of land is a. Zero b. Greater than one c. Less than one d. Equal to one Labour cannot be separated from a. Capital b. labourer c. profit d. organization Reward paid to capital is a. interest b. profit c. wages d. rent A successful entrepreneur is one who is ready to accept a. Innovations b. Risks c. deciding the location of the production unit d. none. Real cost is a) pain and sacrifice b) subjective concept c) efforts and foregoing leisure d) All the above Economic cost includes explicit cost and implicit cost a) implicit cost b) social cost c) fixed cost d) money cost
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social costs are those costs all of these a) not borne by the firms b) incurred by the society c) health hazards d) all of these Average fixed cost is obtained by dividing a) TC/Q b) TFC/Q c) TVC/Q d) None Marginal revenue is the least addition made to the a) average revenue b) Total production c) Total revenue d) none Perfect competition is a market situation where we have a single seller a. a single seller b. two sellers c. large number of sellers d. few sellers A firm can achieve equilibrium when its a. MC = MR b. MC = AC c. MR = AR d. MR = AC The firm and industry are one and the same under a. perfect competition b. duopoly c. oligopoly d. monopoly Under perfect competition, the demand curve is a. Upward sloping b. horizontal c. downward sloping d. vertical Most important form of selling cost is a. Advertisement b. Sales c. Homogeneous product d. None Rent is the price paid for the use of a) Capital b) Organisation c) Labour d) Land Profits are the reward for a) land b) capital c) labour d) organisation The demand for labour is a) effective demand b) direct demand c) derived demand d) elastic demand. The author of the concept of quasi rent is a) Adam Smith b) Marshall c) Ricardo d) Samuelson The author of liquidity preference theory is a) J.M. Keynes b) Marshall c) Samuelson d) Knight The macro economic thinking was revolutionized by a) David Ricardo b) J.M. Keynes c) Adam Smith d) Malthus The Classical Theory assumed the existence of a) Unemployment b) Disguised unemployment c) Full employment d) Under-employment The central problem in Macro Economics is a) Income and employment b) Price and Output c) Interest and Money d) None To explain the simple theory of income determination, Keynes used a) Consumption and Investment b) Aggregate demand and aggregate supply c) Production and Expenditure d) All the above The marginal propensity to consume a) S/Y b) C/y c) P/Q d) C/Y Monetary policy is controlled by a) central government b) state government c) central bank d) private sector. Currency with the public is known as a) M1 b) M2 c) M3 d) M4 Bank rate is raised during
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a) deflation b) inflation c) stable prices d) unemployment During inflation a) Businessmen gain b) wage earners gain c) salaried people gain d) Rentiers gain A situation marked by rising prices and stagnation in demand is known as a) Cost-push inflation b) demand pull inflation c) stagflation d) wage push inflation. Public finance is concerned with the income and expenditure of a) Private sector b) Agricultural sector c) Public authorities d) Industrial sector Tax revenue deals with the a) Fees b) Kinds of taxes c) Revenue d) Non tax revenue The federal form of government consists of a) Central, state and local government b) central and state government c) State and local government d) above all The compulsory charge levied by the government is a) License b) Gifts and grants c) Loan d) Tax In ZBB every year is considered as a a) base year b) financial year c) new year d) academic year Fill in the blanks The term micro means_________ Ans : small Strictly speaking production refers to the creation of__________ Ans : utilities Exchange of goods for goods is known as _________ Ans : barter Economics is a _________ Ans : Science social An example of cosmopolitan wealth is _____________ Ans : ocean In a traditional economy, basic problems are solved by____ and _____. Ans : Customs and Traditions Most of the economic activities of capitalism are centered on__________ Ans : Price Mechanism Production possibility curve is also known as _________ Ans : Transformation / producton possibility frontier The prime motive of socialist economy is __________. Ans : Social /COLLECTIVE WELFARE Under mixed economy, the economic control is exercised by _________ and ________. Ans : Private and public sectors. ____________ means using up of goods and services Ans : Consumption wants may be both ________ and _________ Ans : Competitive and complementary Marshallian utility approach is ________ Ans : Cardinal utility analysis Marginal utility falls to zero, when the total utility is __________ Ans : Total utility An indifference curves is _________ to the origin. Ans :convex The demand curve slopes downwards due to _______ Ans : Law of diminishing marginal utility Adding up of individual consumers schedule is _______ Ans : Market demand schedule Goods that are demanded for their social prestige come under _____ Ans : Veblen effect The concept of elasticity of demand was introduced by _________ Ans : Alfred Marshall The rate of change of supply to a change is price is ________ Ans : Elasticity of supply.
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____________ is the major determinant of supply. Ans : Price Agriculture, industry, growth and distribution are the _______ of the economy. Ans : Subsystems At _______ price, there is no tendency to change the price or quantity. Ans : Equilibrium Modern economists divide time periods into ______ and ________ Ans : Short period and long period The supply curve in the market period is a _________ line. Ans : Vertical Land and labour are called ____________ factors Ans : primary An enquiry into the nature and causes of wealth of nations was written by _________. Ans : Adam Smith ___________ is limited by the extent of market. Ans : Division of labour ____________ is man-made physical goods used to produce other goods. Ans : capital The functional relationship between inputs and output is known as _________. Ans : Production function. Money cost is also called ________. Ans : Nominal cost Economic profit is the difference between total revenue and_________. Ans : Economic cost / total cost the distinction between the fixed and variable factors is possible only in ________. Ans : Short run Total cost is the sum of _________ Ans : total fixed cost and total variable cost The marginal cost curve is _________ Ans : U shaped Under perfect competition, the firms are producing ______ product. Ans : homogeneous When the Average revenue of the firm is greater than its average cost, the firm is earning ________ Ans : Super normal profit The perfect competitive firms are _________ Ans : price-takers Monopoly power achieved through patent right is called _________ Ans : legal monopoly Firms realize the importance of ________ under oligopoly. Ans : mutual co-operation Marginal productivity theory is the _________theory of distribution. Ans : general Marginal productivity theory is based on the assumption of ____________ competition. Ans : perfect Transfer earnings refer to ___________ cost. Ans : opportunity Money wages are also known as __________ wages. Ans : nominal Organization is done by the ___________ Ans : entrepreneur The term consumption function explains the relationship between________ and ________ Ans : Income and Consumption _________ is the ratio of charge in saving to a change in income. Ans : Marginal Propensity to save The worldwide depression of 1930s was also caused by a ________ Ans : Fall in investment __________ refers to the cash holdings of the people. Ans : Liquidity Preference The magnified effect of initial investment on income is called______ effect. Ans : Multiplier The direct exchange of goods for goods is known as _________ Ans : barter system Deflation is a period marked by __________ prices Ans : falling The equation of exchange (MV = PT) was given by Ans : Prof. Irving Fisher

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Galloping inflation is also known as ________. Ans : hyper-inflation or run-away inflation Monetary policy is usually effective in controlling __________. Ans : inflation _______ means different sources of government income. Ans : Public revenue the absence of direct and proportional benefit is ________ Ans : Quid pro quo __________ are considered as fundamental principles of taxation. Ans : canons of taxation The classification of direct and indirect taxes is based on criterion of _________ tax. Ans : shifting of the incidence _________ tax is a blend of progressive tax and proportional tax. Ans : Degressive Match the following: Principles of Economics Marshall First Nobel prize Timbergen and Frisch Dynamic approach Time Element Wealth Stock Income Flow Minimum cost Maximum benefit Opportunity cost next alternative foregone private property Laissez faire economy Bureaucratic expansion socialism Market forces supply, demand and price Wants Advertisements Principles of economics Marshall Maximum social advantage Hicks and Dalton Indifference curve Ordinal Ranking Luxuries Diamond, Jewels Positive relationship of Veblen effect price and demand Tea and coffee substitutes Segment between two points Arc Ed > 1 elastic demand Cross-elasticity is zero X and Y are not related Equilibrium Pair of price and quantity Excess demand D>S Price discount Annual stock Long period supply curve More elastic Short period price Demand and supply. Entrepreneur, an innovator Schumpeter Division of labour Adam Smith Production function Cobb Douglas Bundle of risks Hawley Exertion of body or mind Marshall Average cost cost per unit TC TFC + TVC
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The long run average cost curve MCn Profit Global market Consumer sovereignty South Africa Technical monopoly Monopolistic competition Residual claimant theory Waiting theory of Interest Loanable Funds Theory Dynamic Theory of profit Risk-bearing theory of profit Aggregate Demand Slope K Y Keynes Quantitative credit control Selective credit control Cheap money policy Wages and prices push one another Value of money Conons of taxation Progressive tax Fiscal policy Regressive tax Balanced Budget -

planning curve TCn TCnTR TC Gold and silver Perfect competition Diamond Coco Cola E.H. Chamberlin Walker Marshall Neo-classical theory Clark Hawley C + I + G +(X-M) Vertical Change/Horizontal Change 1/1-MPC C+S Liquidity Preference Bank rate Moral Suasion Low rate of interest Creeping inflation. Purchasing power of money Adam Smith Best tax system Rebate and subsidies Tax rate decreases Revenue and expenditure are equal

Answer in a word or two : (60 questions for each question, one mark) What is the other name for Economics? Political economy What are the subjects that econometrics make use of ? Statistics, mathematics, economics What is the method that Ricardo made use of? Deductive method Give one or two examples of free goods. Air, sunshine What is the other name for money income? nominal income Is traditional economy a subsistence economy? Yes What is the basic force that drives a capitalist economy? Profit Motive What is the result of over-production? Depression Name any two successful socialist economies. China and Cuba Is there planning under mixed economies? Yes, Manufactures consumer and capital goods in the interest of public welfare. Define Utility. Want satisfying power
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What is the other name for the law of Equi-Marginal Utility? Gossens second law What is Indifference curve? Locus of different combinations of two commodities What is Indifference Map? It is a group of indifference curves for two commodities What is the other name for budget line? Price ratio line What is the basic assumption of economic theory? Other things being equal / ceteris paribus condition How does the demand change during boom and depression? During boom demand increases and during depression demand decreases Give the formula for point method. ep = lower segment of the demand curve / upper segment of the demand curve What is income elasticity of demand? The degree of responsiveness of demand to change in income. When the demand for labour is inelastic, can a trade union raise wages? Yes What is equilibrium in general? State of rest / balance What are the determinants of shift in demand curve? Income, taste, price of substitutes Who has introduced the time element? Alfred Marshall Give an example for fixed input? Heavy machinery / building and capital equipments Is supply fixed in the market period? Yes Who is the changing agent of the society? Entrepreneur How do internal economies arise? From within the firm What is other name for isoquant? Iso-Product curve Give the condition for producers equilibrium ? MRTS xy = Px / Py State the Cobb-Douglas production function. Q = b La Cb When average revenue remains constant what will be M.R.? M.R. remains constant / coincide with A.R. What is Marginal Revenue? Addition made to the total revenue. What is break-even point? No - profit no-loss point What is an envelope curve? It is a group of short run cost curves (planning curve) How will you calculate AC? TC/q What is an industry? Group of firms Who undertakes the public utilities? state How does the government control monopoly? taxation / legislative method What is the essential feature of monopolistic competition? product differentiation In which year the MRTP Act was passed? 1969 According to Ricardio, do all lands get rent? No Even if all lands are equally fertile, can rent arise? Yes Who is the author of Agio theory of interest? Bohm-Bawerk Who is the author of the rent theory of profits? Prof. Walker What is the name of Schumpeters theory of profits? Innovation theory What crippled the free enterprise economies of US and UK? Great Depression State J.B. Says Law of Market. Supply creates its own demand Who is the author of the General Theory of Employment, Interest and Money? J.M. Keynes
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Name the point of intersection of Aggregate Demand and Aggregate Supply. Keynesian cross Give the formula for Multiplier. K = 1 / 1-MPC Name the bank which controls money supply in a country. central bank When is dear money policy followed? during inflation to central money What is the name of inflation without a rise in price level? suppressed inflation Is wage cut a remedy for depression? No Give the example of a country that experienced hyperinflation. Germany What is a tax? Compulsory contribution by each person Give the expansion for VAT. Value added tax What is the meaning of proportional tax? Uniform tax rate What are the kinds of budget? Balanced and unbalanced budget What is public debt? Borrowing from the public Answer the following questions in four or five lines (3 marks) Chapter - 1 State Alfred Marshalls definition of Economics. In 1890, Alfred Marshall wrote a book Principles of Economics. He defined Economics as a study of mankind in the ordinary business of life According to him study of man is more important than the study of wealth. What are the divisions of Economics? 1. Consumption 2. Production 3. Exchange 4. Distribution 5. Public Finance

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Describe the relationship between Economics, Mathematics, Statistics. 1. Statistics is the science of averages. 2. Many tables and diagrams used in economics are based on statistical analysis. 3. Mathematical methods are largely used in modern economics. Distinguish between free goods and Economic goods. Free goods Economic goods 1. Gifts of nature (Air, sunshine) 1. They are produced 2. Do not command price in the market 2. Command a price in the market 3. They are not scarce 3. They are scarce 4. They have no value in exchange 4. They have value in Exchange Explain the difference between value in use and value in exchange. Value has two kinds - Value in use and value in exchange Value in use : Air, rain and sunshine have value in use. There is no price. Do not have value in exchange. Value - in exchange : Economics gives importance to those goods which have value in exchange. For a good to have value in - exchange, it must possess utility, it must be scarce in relation to demand and it must be possible for us to exchange it. Chapter - 2 What are the basic issues / problems of any society?
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1. What to produce ? How much? 2. How to produce? 3. For Whom to produce? Name the important general economic systems. 1.Traditional Economy. 2.Capitalist Economy. 3.Socialist Economy and 4.Mixed Economy List the basic features of socialism. 1. Social welfare motive. 2. Limited Right to private property. 3. Central planning 4. Market forces Is India a mixed economy? Explain. Yes, Both Public and private sector co exists and exercise economic control. Government Sector : All decisions regarding what, how and for whom to produce are taken by state. Private sector : Produces and distributes goods and services. What is opportunity cost? 1. The next best alternative foregone. (or) 2. The benefits that could be received from the opportunity. (or) 3. Differences between the concepts of economic cost and accounting cost. Chapter - 3 What are causes for wants? 1. Arises due to psychological causes. 2. Arises due to social causes. 3. Arises due to customs and habits. 4. Arises due to advertisements. What are the classifications of goods. (wants) 1. Necessaries (Food, Clothing) 2. Comforts (fruits, milk) 3. Luxuries (diamond jewels) Define the Law of Diminishing Marginal Utility. The additional benefit which a person derives from a given increase of his stock of a thing diminishes with every increase in the stock that he already has. (Marshalls law) What are the properties of Indifference curve? 1. Slopes downwards to the right. 2. Convex to the origin. 3. No two Indifference curves can ever cut each other. Define consumers surplus in the words of Marshall. The excess of price which a person would be willing to pay rather than go without the thing over that which he actually does pay is the Economic measure of this surplus of satisfaction. Consumers surplus = potential price Actual price. Chapter - 5 What is equilibrium price? At a particular price, the quantity demanded by the buyer is equivalent to the quantity seller is willing to sell. It is the point of intersection of the supply curve and the demand curve.
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Distinguish between change in demand and shift in demand. Change in demand Shift in demand 1. Due to change in factors. 1. Due to change in price 2. Factors shift the demand curve as a 2. Movement on the same demand curve whole 3. Only one demand curve exists. 3. More than one demand curve occurs. What are the determinants of shift in supply? 1. Number of producers or firms 2. Prices of factors 3. Prices of other products 4. Taxes and subsidies. 5. Production technology Differentiate the short period from the long period. Short period : some inputs cannot be varied. Long period : All inputs can be varied. (changed) Write a short note on market period. 1. Very short period and during this period firms cannot change their supply in response to changes in demand. 2. Supply is fixed. 3. Price is determined according to demand. Eg. Fruits, flowers. Chapter - 6

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Name the types of utility. 1) Form utility 2) Place utility 3) Time utility and 4) Possession utility. Define labour. Labour is the human input. The use or exertion of body or mind, partly or wholly, with a view to secure an income apart from the pleasure derived from the work. Marshall. What is meant by division of labour? Dividing the process of production into distinct and several component processes and assigning each component in the hands of a labourer or a set of labourers. Eg. : production of Readymade garments. What are the forms of capital? 1) Physical capital or Material Resources. (Plant and machinery) 2)Money Capital or monetary Resources (Bank deposits, shares and securities) 3) Human Capital or Human Resources. (education, health) What is Production function? What are its classifications? The functional relationship between inputs and outputs is known as production function. Inputs : land, labour, capital and enterprise. Output : refers to the volume of goods produced. Classification :

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1)Short-run production function which is studied through Law of Variable Proportions. 2)Long-run production function which is explained by Constant Returns to scale. 26. What are economic costs? Includes Explicit cost and implicit cost. The money rewards for the own services of the entrepreneur and the factors owned by himself and employed in production are known as implicit cost. What is Marginal cost. Marginal cost is the addition made to the total cost by the production of one additional unit of output. Mention the relationship between SAC and SMC 1) SMC < SAC, SAC is falling 2) SMC > SAC, SAC is increasing 3) SMC must cut the SAC at SACs minimum point from below. At the minimum point SMC = SAC. LESSON - 10 What are the criticisms of says law? 1. Great Depression made says law unpopular. 2. All incomes earned are not always spent on consumption. 3. Whatever saved is not invested. 4. Law was based on wrong analysis of market. 5. Suffers from the fallacy of aggregation. 6. Aggregate supply and aggregate demand are not always equal. 7. Rate of interest is not the equilibrating factor. 8. Capitalist system is not self adjusting always. 9. Perfect competition is an unrealistic assumption. 10. Money is a dominant force in the economy. 11. Law is applicable only for a long period. 12. Says law holds good only in the barter economy. Draw the flow chart to depict the essence of Keynes theory.

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Basic ideas of Keynes : 1. Total income depends on total employment. 2. Total employment depends on effective demand. 3. Depends on consumption expenditure and investment expenditure. 4. Consumption depends on income and propensity to cosume. 5. Investment depends upon the Marginal efficiency of capital and the rate of interest. 3. Describe the consumption function with a diagram. Consumption Function :1. People spend most of their income on commodities. 2. Some spend their income fully 3. Some others spend a portion and keep the rest for saving. 4. It is about the relationship between income and consumption.

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Graphical explanation : 1. OY axis represents income, OC represents expenditure. 2. Propensity to consume is the ratio that measures the functional relationship between income and consumption. 3. The psychology of the community is such that when real income is increased but not so much as income. 4. C = a + b y . ( 2 ) C = 4 + 0.8Y 5. The consumption curve CC is a short-run curve. 6. Consumption takes place even when income is zero. 7. Curve starts from 4 on the vertical axis. 8. In equation 80% of additional income is spent. 9. MPC = C/ Y 10. Autonomous consumption. That is consumption is not related to income. 11. Slope curve b is marginal propensity to consume. 4. What are the determinants of consumption other than income? 1. Income distribution 2. Size and nature of wealth distribution 3. Age distribution of population 4. Inflation or price level 5. Government policies 6. Rate of interest 7. Expectations about price, income, etc. 8. Advertisements 9. Improvement in the living standard 10. Changes in cultural values What are the assumptions of Keynes Simple Income Determination? Income Determination :1. There are only two sectors viz. consumers ( C ) and firms ( I ). 2. Government influence on the economy is nil. ( G = 0 ) 3. Closed economy (x M = 0) 4. Wages and prices remain constant. 5. There are unemployed resources and hence less than full employment equilibrium prevails. 6. There is no variation in the rate of interest. 7. Investment is autonomous. 8. The consumption expenditure is stable. 9. Due to the first three assumptions. Y = C + I + G + (X M) Y=C+I Chapter - 12 1. Explain the canons of taxation. Canon of equity 1. It means that taxes should be imposed according to the capacity of the tax payer.
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2. Poor should be taxed less and rich should be taxed more. 3. This canon involves the principle of justice. Canon of certainty Each tax payer should know that the amount of tax to be paid, when to be paid, and where to be paid and also should be certain about the rate of tax to make investment decisions. Canon of convenience 1. Tax payment should be convenient and less burden to the tax payer. e.g. income tax - collected at source, land tax - collected after harvest. Canon of economy 1. The cost of collecting the revenue should be kept at the minimum possible level. 2. The tax laws and procedures should be made simple, administrative expenditure to be kept at a minimum. 2. What are the main sources of tax and non-tax revenue of the state government ? 1. Land revenue, 2. Taxes on land and building 3. Taxes on the consumption of electricity 4. Taxes on agricultural income, 5. Excise duty on alcoholic liquors and narcotics, 6. Taxes on vehicles, animals and boats, 7. Entertainment tax, 8. Taxes on trade, profession and employment, 9. Income from irrigation and forests, 10. Grants from the central government and 11. Taxes on advertisements other than those in newspaper, 12. Stamp duties, court fees and registration, Explain Budget - balanced and unbalanced budget. Budget : Statement of receipts and expenditure. April 1 to March 31. Indicates the probable income and expenditure of the government, the financial policies, taxation measures, investment opportunities, extent of saving, utilization of resources, mobilization of capital. Definition - Dimock : A balanced estimate of expenditures and receipts for a given period of time. Balanced Budget : Government budget is said to be balanced when its tax revenue and expenditure are equal. Over a period of time both are equal. Unbalanced Budget : (surplus or Deficit) Governments income and expenditure are not equal. Surplus Budget :

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When there is an excess of income over expenditure Deficit Budget : When there is an excess of expenditure over income. 14. What are the limitations of fiscal policy ? 1) Size of Fiscal measures * Not a mere statement of receipts and revenues but shapes the economic structure of a country. * Direct taxation at times become an instrument of limited applicability, as the vast majority of the people are not covered by it. * When the total tax revenue forms a smaller portion of the national income, fiscal measures will not step up the sagging economy requiring massive help. 2. Fiscal policy as ineffective anti-cyclical measure * When the different sectors of the economy are not closely integrated with one another will not stimulate economic growth. * Action taken by the government may not always have the same effect. * Recession in some sectors is followed by a rise in price in other sectors. 3. Administrative delay * Fiscal measures may introduce delay, uncertainties and arbitrariness arising from administrative bottlenecks. * As a result, fiscal policy fails to be a powerful. Other Limitations * Large scales of underemployment, lack of co-ordination from the public, tax evasion, low tax base etc.

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Differentiate between the direct and indirect taxes? Direct tax Indirect tax 1. Dalton : tax paid by a person on whom 1. imposed on one person, paid by it is imposed. another. 2. Impact of the tax fall on the same 2. Impact of tax falls on one person and person incidence of the tax falls on another person 3. Eg. Income tax, gift tax 3. Excise duty, sales tax 4. Collected from the public directly 4. imposed on commodities & services. 5. Imposed on and collected from the 5. Incidence is upon one person who same person ultimately pays it. 6. One cannot evade paying. 6. One can evade paying tax 7. Transfer of tax is difficult. 7. Easy to transfer tax. 8. No shifting of incidence. 8. Shifting of incidence is there. 9. Tax imposed on rich. 9. Tax is imposed on poor.

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(20 marks) Chapter - 4 31. Explain Law of demand with the help of diagram. Demand and supply :Demand for a commodity refers to the desire backed by ability to pay and willingness to buy it. If a person below poverty line wants to buy a car, it is only a desire but not a demand as he cannot pay for the car. If a rich man wants to buy a car it is demand as he will be able to pay for the car. Thus desire backed by purchasing power is demand. The demand for any commodity mainly depends on the price of that commodity. The other determinants include price of related commodities, income of the consumers, tastes and preferences of consumers, and the wealth of consumers. Hence the demand function can be written as Dx = f(Px, Ps, Y, T, W) Dx = demand for good x. Px = price of good x. Ps = Price of related goods Y = income T = taste and preferences of the consumers w = wealth of the consumer Price (Rs.) Quantity Demanded (units) 6 10 5 20 4 30 3 40 2 50 1 60 The above said is a demand schedule. It shows a list of prices and corresponding quantities demanded by an individual consumer. This is an individual demand schedule. Demand Curve : The demand schedule can be converted into a demand curve.

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Quantity Demanded

Law of Demand :Law of demand states that there is a negative or inverse relationship between the price and quantity demanded of a commodity over a period of time.
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Definition :Alfred Marshall stated that the greater the amount sold, the smaller must be the price at which it is offered, in order that it may find purchasers; or in other words, the amount demanded increases with a fall in price and diminishes with rise in price. According to Ferguson, the law of demand is that the quantity demanded varies inversely with price. The people will buy more at lower prices and buy less at higher prices - other things remaining the same. Law of Demand. Assumptions :1. No change in the consumers income. 2. No change in consumers tastes and preferences. 3. No changes in the prices of other goods. 4. No new substitutes for the goods have been discovered. 5. People do not feel that the present fall in price is a prelude to a further decline in price. Demand Schedule and individual demand schedule Demand schedule is a tabular statement showing of how much of a commodity is demanded at different prices.

6 5 4 Price 3 2 1 0 10 20 30 40 50 Quantity Demanded Price

In the above figure DD is the demand curve. The curve slopes downwards from left to right showing that when price rises less is demanded and vice versa. Thus the demand curve represents the inverse relationship between the price and quantity demanded other things remaining constant. Why does the demand curve slope downwards? The demand curve slopes downwards mainly due to the law of diminishing marginal utility. The law of diminishing marginal utility states that an additional unit of a commodity gives a lesser satisfaction. Therefore the consumer will buy more only at a lower price. The demand curve slopes downwards because the marginal uitility curve also slopes downwards. Individual demand and market demand schedules. Individuals demand schedule tells the quantities demanded by an individual consumer at different prices. Individual demand schedule for oranges : Price of Orange (Rs.) Quantity of Oranges 5 1

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4 3 2 1

2 3 4 5

Explanation :It is clear from the schedule that when the price of orange is Rs.5 the consumer demands just one orange. When the price falls to Rs.4 he demands 2 oranges. When the price falls further to Rs.3, he demands 3 oranges. Thus when the price of a commodity falls, the demand for that commodity increases and vice versa. Market demand schedule A demand schedule for a market can be constructed by adding up demand schedules of the individual consumers in the market. Suppose that the market for oranges consists of 2 consumers. The market demand is calculated as follows : Demand schedule for two consumers and the Market demand schedule : Price of oranges in Quantity Demanded Rs. Consumer I Consumer II Market Demand 5 1 1 4 2 1 3 3 3 2 5 2 4 3 7 1 5 4 9 Market demand curve The market demand also increases with a fall in price and vice versa.

32.

Explain the methods of measurement of price elasticity of demand in detail. Price Elasticity of Demand :The rate at which demand changes to a change in price. The degree of responsiveness of quantity demanded to a change in price is called price Elasticity of Demand.

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Price elasticity of demand

Percentage change in quantity demanded Percentage change in price

Q
Symbolically,

ep

Q p

Q P Q P

Measurement of price elasticity of demand :Important methods for calculating price elasticity of demand are 1) Percentage method 2) Point method or slope method 3) Total outlay method 4) Arc method 1. Percentage method The relative change in demand is divided by relative change in price (or) percentage change in demand is divided by percentage change in price.

For example, the price of rice rises by 10% and the demand for rice falls by 15%. Then ep

15 1.5 10

This means that the demand for rice is elastic. If the demand falls to 5% for a 10% rise in price. This means the demand for rice is inelastic. Five measures of elasticity :a) Relative elastic demand (ed > 1) b) Relatively inelastic demand. (ed < 1) c) Unitary elastic demand. (ed = 1) d) Perfectly inelastic demand. (ed = 0) e) Perfectly elastic demand. (ed = )
Y P P1 D D Y P

P1 X 0 Q Q1 Quantity Demanded 0 Q

D Q1 X Quantity Demanded

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Point method :We can calculate the price elasticity of demand at a point on the linear demand curve. Formula to find out Lower segment of the demand curve ep = . Upper segment of the demand curve Example :- The length of the demand curve below is AB = 4 cm.

Exactly at middle point of AB demand curve,

(Anything by zero becomes infinity a mathematical principle Total outlay method :We can measure elasticity through a change in expenditure on commodities due to a
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change in price. 1. Demand is elastic, if total outlay or expenditure increases for a fall in price (ep > 1) 2. Demand is inelastic, if total outlay or expenditure falls for a fall in price. (ep < 1) 3. Elasticity of demand is unitary, if total expenditure does not change for a fall in price (ep = 1) The results are tabulated in the following table.

4) Arc method Segment of a demand curve between two points is called an Arc. Arc elasticity is calculated from the following formula.

Ep

q1 q2 P P 1 2 Q1 q2 P 1P 2
q p Q1 q2 p1 p2 q p p2 1 Q1 q2 p q p1 p2 p Q1 q2

Q = change in quantity demanded P = change in price of the commodity P1 = original price P2 =new price Q1 =original quantity Q2 = new quantity

Arc elasticity formula should be used when the change, in price is some what large. It can be shown by diagrams.

In the above figure we can measure arc elasticity between points A and B on the demand curve; we will have to take the average prices of OP1 and OP2 and average of the two quantities demanded (original and the new). This is Arc Elasticity of Demand.

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Chapter 1 Nature and scope of Economics Choose the correct answer :The author of wealth definition is : (a) Alfred Marshall b) Lionel Robbins c) Adam Smith The author of scarcity definition is (a) Adam Smith b) Samuelson c) Alfred Marshall The concept of Net Economic Welfare has been given by (a) Samuelson b) Marshall c) Adam Smith Economics is a a) positive science b) normative science c) Both In economics, we make use of a) deductive method b) inductive method c) Both

1. 2. 3. 4. 5.

d) Samuelson d) Lionel Robbins d) Lionel Robbins d) none d) none

6. 7. 8. 9. 10.

Fill in the blanks :The term micro means __________. Strictly speacking production refers to the creation of _________. Exchange of goods for goods is known as _________. Economics is a ___________ Science. An example of cosmopolitian wealth is _________. Match the following :Principles of Economics First Nobel prize Dynamic Approach Wealth Income

11. 12. 13. 14. 15.

a. Stock b. Flow c. Marshall d. Time element e. Timbergen and Frisch

16. 17. 18. 19. 20.

Answer each one of the questions in a word or two: What is the other name for economics? What are the subjects that Econometrics make use of ? What is the method that Ricardo mode use of ? Give one or two examples of free goods? What is the other name for money income? Chapter:2 Basic Economic problems The basic economic problems are common to--a. Capitalismb. Socialism c. Mixed economy Traditional economy is a a. Subsistence Economy b. Market economy d. Monetary economy The basic force that drives the capitalist economy is

1. 2.

d. All of these d. Command economy

3.
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4.

5.

6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

1.

2. 3.

4.

5.

a. Planning b. Technology c. Government d. Profit motuse In a socialist economy all decisions regarding production and distribution are taken by a. Market forces b. Central planning authorityc. Customs and traditions d. Private sector Red tapism and corruption lead to a. Inefficiency of production b. Inequality of income and wealth c. Absence of technology d. Efficient use of resources Fill in the blanks: In a traditional economy, basic economic problems are solved by ------ and ----Most of the economic activities of capitalism are centred on ------Production possibility curve is also known as ----The prime motive of socialist economy is -----Under mixed economy, the economic control is exercised by ------ and -----sectors. Match the following: Minimum cost a. next alternative foregone Opportunity cost b. socialism Private property c. supply, demand, price Bureaucratic expansion d. maximum benefit Market forces e. Laissez-Faire economy Answer each one of the questions in a word or two: Is traditional economy a subsistence economy. What is the basic force that drives a capitalist economy? What is the result of over production? Name any two successful socialist economies. Is there planning under mixed economy? Chapter : 3. Theory of consumer Behaviour Choose the correct answer: Necessaries, comforts and Luxuries are a. Classification of goods and services b. Classification of wants c. Classification of utility d. None of the above The Indifference curve Approach was introduced by a. Alfred Marshall b. Lionel Robbins c. J.R.Hicks and RGD. Allen Utility is a a. Social concept b. Subjective / Psychological concept c. Political concept d. Scientific concept Single commodity consumption mode is a. Production possibility curve b. Law of Equi Marginal utility c. Law of supply d. Law of diminishing marginal utility Consumers surplus is a. potential price - Actual price b. MVn = TVn TVn 1 c. Demand = Supply d. None Fill in the blanks:
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6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

1. 2.

3.

4.

5.

6. 7. 8. 9. 10. 11. 12.


25

---------- means using up of goods and services. Wants may be both ------- and ----Marshallian utility approach is ------- analysis. Marginal utility falls to zero when the total utility is -----An indifference curve is ------ to the origin. Match the following: Wants a. Marshall Principles of Economics b. Hicks and Dalton Maximum Social advantage c. Diamond jewels Indifference curve d. Advertisements Luxuries e. Ordinal ranking Answer in a word or two: Define Utility. What is the other name for Equi-Marginal Utility? What is Indifference Curve? What is Indifference Map? What is the other name for budget line? Chapter: 4. Demand and Supply Choose: Demand for a Commodity depends on a. price of that commodity b. price of related goods c. Income d. All the above Law od demand establishes a. Inverse relationship between prices and quantity b. Positive relationship between price and quantity c. Both d. None Increase in demand is shown by a. Movement along the same demand curve b. Shifts of the demand curve c. The highest point on the demand curved. Lowest point on the demand curve The degree of response of demand to change in price is a. Income elasticity of Demand b. Cross Elasticity of Demand c. Price Elasticity of Demand d. All the above Factors determining supply are a. production technology b. prices of factors of production c. Taxes and subsidies d. All the above Fill in the blanks: The demand curve slopes downwards due to ----Adding up of individual consumers schedule is Goods that are demanded for their social prestige come under ------ effect. The concept of elasticity of demand was introduced by -----The rate of change of supply to a change in price is -----Match the following: Positive relationship a. substitutes Tea and Coffee b. inelastic demand
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13. 14. 15. 16. 17. 18. 19. 20.

1.

2. 3. 4. 5.

6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

Segment between two points c. X and Y are not related Ed >1 d. Veblen effect Cross elasticity is zero e. Arc Answer in a word or two: What is the basic assumption of economic theory? How does the demand change during boom and depression? Give the formula for point method. What is income elasticity of demand? When the demand for labour is inelastic can a trade union raise wages? Chapter: 5. Equilibrium Price Choose the correct answer: At the point of equilibrium a. only one price prevails b. Quantity demanded = quantity supplied c. Demand curve intersect supply curve d. All the above Above the equilibrium price a. S<D b. S>D c. S=D d. None Changes in quantity demanded occura. Only when price changes b. Due to change of taste c. both d. None The time element in price analysis was introduced by a. J.R. Hicks b. J.M.Keynes c. Alfred Marshell d. J.S. Mill In the long period a. All factors change b. Only variable factor changes c. Only fixed factor changes d. Variable and Fixed remain constant Fill in the blanks: -------- is the major determinant of supply. Agriculture, industry, growth and distribution are the ------- of the economy. At ------- price there is no tendency to change the price or quantity. Modern economists divide time periods into ------- and ------The supply curve in the market period is a -------- line. Match the following: Equilibrium a. Annual stock clearance Excess demand b. More elastic Price discount c. Pair of price and quantity Long period supply curve d. D>S Short period price e. Demand and supply Answer in a word or two: What is equilibrium in general? What are the determinants of shift in demand curve? Who has introduced the time element? Give an example for fixed input. Is supply fixed in the market period? Chapter: 6. Production
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1. 2. 3. 4. 5.

6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

1.

2. 3.

4. 5.
27

Choose the correct answer: Production refers to a. Destruction of utility b. Creation of utilitiesc. Exchange value d. None The initial supply price of land is a. Zero b. Greater than one c. Less than one d. Equal to one Labour cannot be separated from a. Capital b. Labourer c. Profit d. Organisation Reward paid to capital is a. Interest b. Profit c. Wages d. Rent A successful entrepreneur is one who is ready to accept a. Innovation b. Risks c. Deciding the location of the production unit d. None Fill in the blanks: Land and labour are called -------- factors An Enquiry into the Nature and causes of wealth of Nations was written by -------------- is limited by the extent of the market. -------- is man made physical goods used to produce other goods. The functional relationship between inputs and output is known as --------Match the following: Entrepreneur, an innovator a. cob Douglas Division of labour b. Hawley Production function c. Schumpeter Bundle of risks d. Marshall Exertion of body or mind e. Adam Smith Answer in a word or two: Who is the changing agent of the society? How do internal economies arise? What is the other name for iso quant? Give the condition foe producers equilibrium. State the Cobb Douglas production function. Chapter : 7 Cost and Revenue Choose the correct answer: Real Cost is a. Pain and Sacrifice b. Subjective concept c. Efforts and foregoing leisure d. All the above Economic cost includes explicit cost and a. Implicit cost b. Social cost c. Fixed cost d. Money cost Social costs are those costs a. Not borne by the firms b. Incurred by the society d. Health hazards d. All of these Average Fixed cost is obtained by dividing a. TC/Q b. TFC/Q c. TVC/Q d. None Marginal Revenue is the least addition made to the
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6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

1. 2. 3. 4. 5.

6. 7. 9. 10. 11. 12. 13. 14.


28

a. Average revenue b. Total production c. Total revenue d. None Fill in the blanks: Money cost is also called as -------Profit is the difference between total revenue and ---------The distinction between the fixed and variable factors is possible only in ------Total cost is the sum of -------The Marginal cost curve is ------ shaped. Match the following: Average cost a. Planning curve TC b. TCn Tcn 1 The long run Average cost curve c. TR TC MCn d. Cost per unit Profit e. TFC + TVC Answer in a word or two: When Average revenue remains constant what will be MR? What is Marginal Revenue? What is break even point? What is envelope curve? How will you calculate AC? Chapter 8 Market structure and Pricing Choose the correct answer: Perfect competition is a market situation where we have a. Single seller b. Two seller c. Large number of sellers d. Few sellers A firm can achieve equilibrium when its a. MC = MR b. MC = AC c. MR = AR d. MR = AC The firm and industry are one and the same under a. Perfect competition b. Duopoly c. Oligopoly d. Monopoly Under perfect competition the demand curve is a. Upward sloping b. Horizontal c. Downward sloping d. Vertical Most important form of selling cost is a. Advertisement b. Sales c. Homogeneous products d. None Fill in the blanks: Under perfect competition, the firms are producing ---------- products When the Average revenue of the firm is greater than its average cost, the firm is earning-8. The perfect competitive firms are --------Monopoly power achieved through patent right is called ------Firms realize the importance of ------ under Oligopoly. Match the following: Global market a. E.H. Chamberlin Consumer Sovereignty b. Coco Cola South Africa c. Gold and Silver Technical Monopoly d. Perfect competition
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15. 16. 17. 18. 19. 20.

1. 2. 3. 4. 5.

6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

1.

Monopolistic competition e. Diamond Answer in a word or two: What is an industry? Who undertakes the public utilities? How does the Government control monopoly? What is the essential feature of monopolistic competition? In which year the MRTP Act was passed? Chapter: 9 Marginal Productivity Theory of Distribution Choose the correct answer: Rent is the price paid for the use of a. Capital b. Organisation c. Labour d. Land Profits are the reward for a. Land b. Capital c. Labour d. Organisation The demand for labour is a. Effective demand b. Direct demand c. Derived demand d. Elastic demand The author of the concept of the quasi rent is a. Adam Smith b. Marshall c. Ricardo d. Samuelson The author of Liquidity preference Theory is a. J.M.Keynes b. Marshall c. Samuelson d. Knight Fill in the blanks: Marginal productivity theory is the -------theory of distribution. Marginal productivity theory is based on the assumption of -------- competition. Transfer earnings refer to -------- cost. Money wages are also known as -------- wages. Organisation is done by the --------Match the following: Residual claimant theory a. Marshall Waiting theory of interest b. Walker Loanable funds theory c. Hawley Dynamic theory of profit d. Neo-classical theory Risk bearing theory of profit e. Clark Answer each one in a word or two: According to Ricardo, do all lands get rent? Even if all lands are fertile can rent arise. Who is the author of Agio theory of interest? Who is a the author of rent theory of profit? What is the name of Schumpeters theory of profits? Chapter : 10 Simple Theory of Income Determination Choose the correct answer: The Macro economic thinking was revolutionized by a. David Ricardo b. J.M. Keynes c. Adam Smith d. Malthus
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2.

3.

4.

5.

The classical theory assumed the existence of a. Unemployment b. disguised unemployment c. Full employment d. Under employment The central problem on Macro economics is a. Income and employment b. Price and output c. Interest and Money d. None To explain the simple theory of income determination Keynes used a. Consumption and investment b. Aggregate demand and Aggregate supply c. Production and Expenditure d. All the above The Marginal propensity to consume S C P P C b. . c. d. a. t y Q Q y Fill in the blanks: The term consumption function explains the relationship between ------ and ------------ is the ratio of change in saving to a change in income. The world wide depression of 1930s was also caused by a --------------- refers to the cash holdings of the people. The magnified effect of initial investment on income is called ------- effect. Match the following: Aggregate demand a. Vertical change / Horizontal change Slope b. C + S K c. C + I + G + ( X M ) Y d. Liquidity preference Keynes e. I / 1 MPC Answer in a word or two: What crippled the free enterprise economies of U.S and UK? State J.B. Says Law of Market? Who is the author of the General theory of Employment, Interest and Money? Name the point of intersection of Aggregate demand and Aggregate supply. Give the formula for Multiplier. Chapter : 11 Monetary Policy Choose the correct answer: Monetary Policy is controlled by a. Central Government b. State Government c. Central Bank d. Private Sector Currency with the public is known as a. M1 b. M2 c. M3 d. M4 Bank rate is raised during a. Deflation b. Inflation c. Stable prices d. Unemployment During inflation a. Businessmen gainb. Wage earners gain c. Salaries people gain d. Renters gain

6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

1. 2. 3. 4.

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5.

6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

1. 2. 3.

4. 5.

6. 7. 8. 9. 10. 11. 12.


31

A situation marked by rising prices and stagnation in demand is known as a. Cost push inflation b. Demand pull inflation c. Stag flation d.Wagepush inflation Fill in the blanks: The direct exchange of goods for goods is known as -----Deflation is a period marked by -------- prices The equation of exchange (MV + PT) was given by -------Galloping inflation is also known as --------Monetary policy is usually effective in controlling ------Match the following: Quantitative credit control a. low rate of interest Selective credit control b. bank rate Cheap Money Policy c. Moral Suasion Wages and prices push one another d. purchasing power of money Value of Money e. Creeping inflation Answer in a word or two: Name the bank which controls money supply in a country. When is dear money policy followed? What is the name of inflation without a rise in price level? Is wage cut a remedy for depression. Give the example of a country that experienced hyper inflation. Chapter : 12 Fiscal Policy Choose the correct answer: Public Finance is concerned with the income and expenditure of a. Private sector b. Agricultural sector c. Public authorities d. Industrial sector Tax revenue deals with the a. Fees b. Kinds of taxes c. Revenue d. Nontax revenue The federal form of Government consists of a. Central, State and local government b. Central and State government c. State and local government d. Above all The compulsory charge levied by the government is a. Licence fees b. Gifts and grants c. Loans d. tax In ZBB every year is considered as a a. Base year b. Financial year c. New year d. Academic year Fill in the blanks: -------- means different sources of government income. The absence of direct and proportional benefit is --------------- are considered as fundamental principles of taxation. The classification of direct and indirect taxes is based on criterion of --------tax. -------- tax is a blend of progressive tax and proportional tax. Match the following: Canons of taxation a. Rebate and subsidies Progressive tax b. Adam Smith
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13. 14. 15. 16. 17. 18. 19. 20.

Fiscal policy c. Tax rate decreases Regressive tax d. Revenue and expenditure Balanced budget e. Best tax system Answer in a word or two: What is a tax? What is VAT? What is the meaning of proportional tax? What are the kinds of budget? What is public debt?

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1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28.

Higher Secondary 2nd year Question Bank for Economics Questions for those students to get pass marks. Part B Answer the following questions in four five lines. 3 marks. Chapter - 1 State Alfred Marshalls definition of Economics. What are the main divisions of Economics Describe the relationship between economics mathematics and statistics? Distinguish between free goods and economic goods. Explains the difference between value in use and value in exchange. Chapter 2 What are the basic issues of any society? Name the important general economic systems. List the basic features of socialism. Is India a Mixed economy? What is opportunity cost? Chapter What are the causes for wants? What are the classifications of goods or wants? Define the Law of Diminishing Marginal utility. What are the properties of Indifference curve? Define consumers surplus in the words of Marshall. Chapter 5 Two questions What is equilibrium price? Distinguish between change in demand and shift in demand. What are the determinants of shift in supply? Differentiate short-period from long period. Write a short note on market period. Chpter 6 Two questions. Name the types of utility. Define labour. What is meant by division of labour? What are the forms of capital? What is production function? What are its classifications? Chapter 7 - Two questions. What are economic costs? Define marginal cost? Mention the relationship between SAC & SMC.

Part C Answer the following questions in a page 10 marks.


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1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

1. 2.

What are the criticisms of says law? Draw the flow chart to depict the essence of Keynes theory. Describe the consumption function with a diagram. Chapter 10 What are the determinants of consumption other than income? _________ What are the assumptions of keynes simple Income determination? Two questions Explain the canons of taxation? What are the main sources of tax and non-tax revenue of the state government? Chapter Define budget? Explain the balanced and unbalanced budger? 12 Differentiate between the direct and indirect taxes? Two What are the limitations of fiscal policy? questions Part D Answer the following in about three pages 20 marks. Discuss the law of Demand. Explain the methods of measurement of price Elasticity of demand in detail. Important questions for students to score full marks. Three marks question bank. State Alfred Marshalls definition of Economics? What are the main divisions of Economics? Describe the relationship between Economics, Mathematics and Statistics. Distinguish between free goods and economic goods. What are the basic issues of any society? Name the important general economic systems. Is India a mixed economy? Explain. What is opportunity cost? What are the causes for wants? What are the classification of goods? What are the properties of Indifference curve? Define consumers surplus in the words of Marshall. Enumerate the determinants of demands. Why does the demand curve slope downwords? Write a note on Giffens Paradox. What are the types of Elasticity of demand? What is equilibrium price? Differentiate the short period from long period. Write a short note on market period. Name the types of utility. Define labour. What re the forms of capital? What is production function? What are its classifications? What are economic costs? Mention the relationship between SAC and SMC. Classify the market based on competition. Mention any three benefits of perfect competition. What is transfer earnings? Distinguish between real wages and money wages. What are the three motives of Liquidity preference? What is effective demand?

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31.

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32. 33. 34. 35. 36. 37. 38. 39. 40. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18.

Write a note on Multiplier. Give the factors on which the aggregate demand depends. Define Money. What are the four components of money supply in India? Define Monetary Policy. What is stagflation? Define public Finance. What is a tax? What is Zero based budget? Question Bank of ten marks What is capitalism? Explain the merits and demerits. What are the Salient features, merits and demerits of socialism What are the merits and demerits of mixed economy? Explain the shift in demand with the help of a diagram. How is the equilibrium price determined in the market period? Describe the characteristics of capital. What are the functions of entrepreneur? Explain the merits and demerits of division of labour. Give a note on Long run Average cost curve. Explain the relationship between AR and MR curve. Explain the relationship between SAC and SMC. What are the critisms of says Law of market? What are the determinants of consumption other than income? What are the assumptions of keynes simple income Determination? Explain the Canons of taxation. What are the main sources of tax and non-tax revenue of the state government? Differentiate between the direct and indirect taxes. What the limitations of fiscal policy? 20 marks Question Bank Chapter 1 Nature and scope of Economics.

1. 2. 3. 4. 5.

Discuss the relationship between Economics and other social sciences. Discuss the nature and scope of Economics. Discuss the nature and importance of Economic Laws. Examine Lionel Robbins definition of Economics. Examine Marshalls definition of Economics. Chapter 3 Theory of Consumer Behaviour

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

Describe the Law of Diminishing Marginal utility with a diagram. Explain the characteristics of Human wants. Explain consumers surplus with the help of a diagram and bring out its importance and its criticism. What is indifference curve Map. Explain the properties of Indifference curve with diagrams. Chapter 4 Demand and Supply Explain the Law Of Demand with diagram. What is Elasticity of Demand? Explain types of Elasticity of Demand. Explain the methods of measurement of price Elasticity of Demand in detail.

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1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28.

Part B Answer the following questions in four or five lines. State Alfred Marshalls definition of Economics. What are the main divisions of Economics?

3 marks

Describe the relationship between Economics, Mathematics and Statistics. Distinguish between free goods and economic goods. Explain the difference between value in use and vanue in exchange. What are the basic issues of any society? Name the important general economic systems. List the basic features of socialism. Is India a Mixed economy? What is opportunity cost? What are the causes for wants? What are the classifications of goods or wants? Define the Law of Diminishing Marginal utility. What are the properties of Indifference curve? Define consumers surplus in the words of Marshall. What is equilibrium price? Distinguish between change in demand and shift in demand. What are the determinants of shift in supply? Differentiate short-period from long period. Write a short note on market period. Name the types of utility. Define labour. What is meant by division of labour? What are the forms of capital? What is production function? What are its classifications? What are economic costs? Define marginal cost? Mention the relationship between SAC & SMC. Part C Answer the following questions in a page.

1. 2. 3. 4.
36

What are the criticisms of says law? Draw the flow chart to depict the essence of Keynes theory. Describe the consumption function with a diagram. What are the determinants of consumption other than income?
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5. 6. 7. 8. 9. 10.

What are the assumptions of keynes simple Income determination? Explain the canons of taxation? What are the main sources of tax and non-tax revenue of the state government? Define budget? Explain the balanced and unbalanced budget? Differentiate between the direct and indirect taxes? What are the limitations of fiscal policy? Part D Answer the following in about three pages 20 marks.

1. 2.

1.

2.

3. 4.

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Discuss the law of Demand. Explain the methods of measurement of price Elasticity of demand in detail. -------------3 marks questions (Note : @ symbol is the number of questions asked in previous years public examinations) i. State Alfred Marshalls definition of Economics. @@@@@@ ii. What are the main divisions of Economics @@@ iii. Distinguish between free goods and economic goods. @@@@ i. Is India a mixed economy. Explain. @@@ ii. What is opportunity cost? @@@@@@@@@@@ iii. List the basic features of socialism. @@@@@@ iv. What are the basic issues of any society. @@@@@@@ i. Name the important general economic systems. @@@@ ii. Define consumers surplus in the words of Marshall. @@@@ i. What are the causes for wants. @ ii. What are the properties of Indifference curve. @@@@@@ iii. Define utility. @ iv. What are the classifications of goods? (wants) @@ i. Write a note on Giffen paradox. @@@@ ii. What is demand? @@@@ iii. Why does the demand curve slope downwards? @@@@ iv. What are the types of Elasticity of Demand? @@ v. Enumerate the determinants of demand. @@ i. What is equilibrium price. @@@@@@@@@ ii. Write a short note on market period. @@@@@@@
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i. Differentiate short period from the long period. @@@@@@@@@ ii. What are the determinants of shift in supply. @@@ iii. Distinguish between change in demand and shift in demand. @ i. Define Labour. @@@@@@ ii. Name the types of utility. @@@@@@ iii. What is meant by economics of scale. @ i. Who is an entrepreneur? @ ii. What are the forms of capital? @@@@@@@ iii. What is meant by division of labour? @@@@ iv. What is meant by production function. What are its classifications? @@ i. What are economic costs. @@@@@@@ ii. Bring out the distinction between short run and long run. @@ i. Mention the relationship between SAC and SMC. @@@@@@@ ii. Define marginal cost. @@@@@@@ iii. What is meant by money cost. @ i. What is standard of living theory of wages. @ ii. What are the three motives of Liquidity preference? @@@@@@@@@ iii. Distinguish between real wages and money wages. @@@ iv. What is transfer earnings? @@@ v. Mention any three benefits of perfect competition. @ vi. What are the assumptions of Marginal productivity theory of distribution? @ i. Write a note on multiplier. @@@@ ii. What is effective demand. @@@ iii. What are the assumptions of says law of market. @@ iv. Give the factors on which the aggregate demand depends. @ i. Define money. @@@@@@ ii. What are the four components of money supply in India. @@@ iii. Define monetary policy. @@@@ iv. What is meant by Reserve money? ? i. Define public finance. @ ii. What is the subject matter of public finance? @@ iii. Define Public finance. @@@ iv. What is tax? @
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v. What are the kinds of tax? @@ vi. What is zero based budget? @@@ 16. 10 marks questions. i. What are the salient features of capitalism? @@@@@@ ii. Explain the merits and demerits of a mixed economy. @@@@@ iii. What are the merits of socialist economy? @@ iv. Write a note on traditional economy. @@ i. How is the equilibrium price determined in the market period? @@@@@@ ii. Explain the shift in demand with the help of a diagram. @@@@@@ iii. Explain with the help of diagram how demand and supply exert influence on price in the short period. @ iv. Describe the flatten long run supply curve. @ v. Explain the shift in supply with diagram. @ i. Distinguish between laws of returns and returns to scale. @@ ii. Explain the merits and demerits of division of labour. @@@@ iii. Define the characteristics of capital. @@ iv. What are the functions of entrepreneur? @@@@ i. Explain the relationship between AR and MR. @@@@@@@@ ii. Give a note on Long-run Average cost curve. @@@@@@@ i. Explain the marginal cost with suitable illustration. @@@@ ii. Explain the relationship between SAC and SMC. @@@@@@@ iii. Explain the short run Average Cost curves. @@ i. Explain the features of perfect competition. @@@@ ii. Describe the wastes of monopolistic competition. @@ iii. What are the methods of controlling monopoly? @@@@ iv. Write a note on product differentiation. @ v. Briefly explain the classification of markets. @ i. What are the criticisms of Says law? @@@@@@@@@ i. What are the determinants of consumption other than income? @@@@ ii. Describe the consumption function with a diagram. @@@@ iii. What are the assumptions of Keynes simple Income determination?@@@@@@@ iv. Draw the flow chart to depict the essence of Keynes theory. @@@@ i. Explain the Canons of taxation. @@@@@@@ ii. What are the limitations of fiscal policy. @ iii. What are the main sources of tax and non-tax revenue of state government? @@@@@ iv. Define budget. Explain the balanced and unbalanced budget. @@@@@ v. What are the main sources of tax and non-tax revenues of central government? @ i. Differentiate between direct and indirect taxes. @@@@@@@@@@ 20 marks questions. i. Discuss the nature and importance of Economic laws. @@@@@@@@ ii. Discuss the nature and scope of Economics. @@ iii. Discuss the relationship between Economics and other social sciences. @ iv. Examine Lionel Robbins definition of Economics. @ i. Explain consumers surplus with the help of a diagram and bring out its importance and criticisms. @@@ ii. Explain the characteristics of human wants. @@@@ iii. Describe the Law of Diminishing Marginal utility with a diagram. @@@@@@
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iv. What is Indifference curve Map. Explain the properties of Indifference curve with diagrams. i. Explain the methods of measurement of Price elasticity of demand in detail. @@@@@ ii. Discuss the Law of Demand. @@@@@@@@@ i. How is price and output determined in the short-run and long-run under perfect competition. @@ ii. How is price and output determined in the short-run under perfect competition. @@@@ iii. Explain the price and output determined under monopoly. @@@@@@@ iv. Explain the advantages and disadvantages of Monopoly. @ i. Describe Loanable Funds Theory of Interest. @ ii. Discuss Marginal productivity Theory of Distribution. @@ iii. Discuss Keynesian Thoery of Interest. @@@@ iv. Examine Ricardian Theory of Rent. @@@@@@ v. Profit is the reward for risk-taking and uncertainty bearing. @ i. Discuss the objectives and instruments of monetary policy. @@@@@@@@ ii. Discuss the causes, effects and remedies for inflation. @@@@@@ --------------

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Commerce 1. Define organization. Louis A. Allen has defined organisation as the process of identifying and grouping the work to be performed, defining and delegating responsibility and authority and establishing relationship for the purpose of enabling people to work most effectively together in acomplishing objectives. Who is a KARTA? The head of the Joint Hindu family is known as KARTA. The members are called coparceners. What is scalar principle? Line of authority must proceed from the highest executive to the worker at the bottom level through a downward flow. This is known as chain of command. Give examples of multinational company? 1. Unilever limited It is a British company 2. Union caribide It is an American company 3. Philips It is a Dutch Company 4. Coco cola It is an American Company State the meaning of Board organaisation? Organisation management is carried on by a government nominated independent Board. It has its own rules and regulations. What is co-ordination? The various activities of undertaking should be co-ordinated to secure the desired results. The purchase department and sales department activities must be well co-ordinated to increase profit. What is unlimited liability? The liability of the proprietor for the debts of the business is unlimited. The creditors have the right to recover their case the business assets are not sufficient to pay their dues. Define sole trader? The sole proprietorship is a form of organization in which an individual introduces his own capital, uses his own skill and intelligence and its entirely responsible for the results of its operations. What is limited parternership? (i) The liability of the partner (ii) Atleast one partner whose liability is unlimited. (iii) The law does not permit the formation of a limited partnership in India. What is a joint and several liabilities? Joint liability The creditors can claim their dues of all the partners.

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Commerce E.M. Pg. No. 1

Several liability 11.

The creditors can take action against any one of the partner.

Define partnership? According to the section 40f Indian partnership act of 1932 The relation between persons who have agree to share the profits of a business carried on by all or any of them acting for all. Define co-operation? The Indian co-operative societies Act, 1912 defines A society which as its objectives for promotion of the interests of its members in accordance with the principle of co-operation. What is meant by one man one vote? (i) Co-operative societies are managed on democratic lines. (ii) Every member has only one vote irrespective of the members of shares held by him. Who are Rochdale pioneers? (i) Robert owen started the first co-operative movement in the year 1844 with 28 members called as Rochdale society of equitable pioneers. (ii) The father of this movement was Robert owen. What is patronage Dividend? The profit of co-operative societies is distributed to the members in proportion of purchases made by them and not on shares held by them. The payment of dividend on shares to members will be at the rate of 14% per annum on the paid up value of shares. Give four examples of co-opertaive super market? Chennai Kamadhenu Super Market Coimbatore Chinthamani Super Market Vellore Karpagam Super Market Salem Ponni co-operative Super Market Define State enterprises? A.H. Hansen says Public enterprise means state ownership and operation of industrial, agriculatural, financial and commercial undertaking. What is nationalization? When governments takes over an existing industrial or commercial unit owned by private persons it is called nationalization. Give four examples of Departmental undertaking. (i) Railways (ii) Defence (iii) Atomic power (iv) Post and telegraph What is Government Company? Any company in which not less than 51% of the paid up share capital is held by the central or state government is known as Government Company.

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Commerce E.M. Pg. No. 2

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Give four examples of Government Companies? (i) BHEL (ii) SAIL (iii) Coal Mines

(iv) State Transport Corporation Ltd.

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Explain the management of public corporation? Public corporation is managed by board of directors. Board is nominated by the government on the bases of their experience and skill. What is limited liability? The liability of the member of a company is generally limited of value of shares. This liability is known as limited liability. What is debenture? Debenture refers to a document issued by a company acknowledging a debt due by it to its holders. It also provides for payment of interest at a fixed rate at stated intervals. It also contain an undertaking to repay the debt or at its options. What is a statutory meeting? The first meeting of the shareholders of a public limited company which is mandatory as per the companies Act. This is held only once in the life time of the company. What do you mean by quorum? The minimum number of members required to be personally present at a meeting for validly transacting any business. Usually quorum is fixed by the Articles. What is an agenda? (i) Agenda means the list of business to be transacted at the meeting. (ii) It is generally prepared by the secretary in consultation with the chairman. What is proxy? The term proxy may refer to a person who is authorized by a member for the purpose of attending a meeting. It also means the instrument by which the proxy is authorized. What is Minutes? (i) The term minutes refers to accurate official record of decisions taken at various company meetings. (ii) Minutes should be brief and factual. Who is an alternate director? If empowered by Articles, the Board may appoint an alternate director during his absence for a period of not less than 3 months from the date in which meetings of the Board are ordinarily held. Define a stock exchange? According to Hastings stock exchange or securities market comparies all the places where buyers and sellers of stock and bonds or their representatives, undertake transactions involving the sale of securities.

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What is listing? The inclusion of the name of a company in the official trade list of a stock exchange is called listing. Listing is now made compulsory for all public companies. What is BOLT? BOLT is the online trading system in use at the stock exchange, Mumbai since March 1995. It is one of the few stock systems in the world handling mixed models of trading, both order driven and quote driven. Who is a speculator? The speculators buy securities with a hope to sell them at a profit, in future. They are not genuine investors. What is a security? A security means a certificate or document indicating either ownership interest (share) or creditorship interest (debenture).

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8 marks 1. Write short notes on Joint Hindu Family business. India is unique in the system of Joint Hindu Families. A joint Hindu family comprises of father, mother, sons, daughters, grandsons and grand daughters. They hold the property jointly. The head of joint Hindu family is known as KARTA. The members are called Coparceners. These families engage in Agriculture, handicrafts small industries etc. There are two laws MITAKSHARA and DAYABHAGA. Governed under HINDU SUCCESSION ACT, 1956. Explain the position of minor in the partnership Firm. A minor is a person who has not completed 18 years of age. A minor cannot become a partner. He can be admitted into the benefits of partnership. Position before attaining majority He can share the property and profits of the firm He can inspect and take copy of the accounts of the firm. His liability is confined only to the extent of his share in the profits and property of the firm. Position of the attaining majority On attaining majority the minor partner has to decide with six months by giving notice whether he shall continue in the firm or not, otherwise he becomes liable to the firm from the date on admission. Write notes on Multinational Companies. The term multinational consists of two different words multi and national.

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It operates in several countries. It is also called as Global giant (or) World enterprise (or) International Enterprise A MNC is operated in more than one country simultaneously. It is generally very large in size. It reduces transport costs There are 500 to 700 MNCs in the world. Ex : Philips, Coca cola.

Explain the various kinds of partners. Sleeping partner : The partners who do not take active interest in the conduct of the business are called sleeping partners. Nominal partner : He does not contribute capital not takes part in the management of the firm. He lends his name to be used as partner in the firm. He is liable to the firms debt. Minor partner : A minor is a person who has not completed 18 years of age where a guardian is appointed by court his age of majority extends to 21 years. Sub Partner : When a partner makes an arrangement with a partner to share his profit he is known as subpartner. What is a partnership Deed? What are its contents? A partnership Deed is a written agreement containing all the terms and conditions of partnership. Name of the firm Date of agreement and principal place of business. Names and addresses of all partners. Duration of partnership. Profit sharing ratio. Amount of capital contributed by each partner. Amount of withdrawal of each partner. Interest on capital and interest on drawings. What are the drawbacks of non-registration of partnership firm? An unregistered firm cannot file any case against its partners. An unregistered firm cannot enforce its claims against third parties for recovering a sum exceeding rupees one hundred. A partner of an unregistered firm cannot file any case against any other partners. The firm forfeits its rights in restricting the outsiders from using the trademarks and copyrights of the firm. What are the demerits of co-operative societies. Inefficient Management

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Commerce E.M. Pg. No. 5

Members of a co-operative society do not generally possess the ability and experience to manage the business. Limited capital The principle of one man one vote discourages the members to invest large amount. Lack of motivation The employees do not have interest to work hard as they get low salaries. Lack of co-operation Members do not have Unity among themselves. Lack of secrecy The business affairs of a co-operative society are openly discussed in the meetings. No Credit facility Credit facilities are not usually offered to members.

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State the meaning of super market and explain its features. It refers to a type of large scale retailing. The articles of daily use are sold in different departments without the help of sales persons, It is started to earn profit. Features It is a form of large scale retailing There are wide variety of goods available The system of self service is used No need for salesman in self service session The layout is in the form of different departments Sales are on cash basis No adulteration is practised. Scarce commodities are also supplied. What are the conditions for issuing shares at a discount? The shares to be issued must be a class already issued. It must be authorized by an ordinary resolution. It should be sanctioned by the Central Government. The maximum rate of discount is 10%. Differentiate between Investors and Speculators. Investors Speculators 1. Interested in safety of his investment Interested in earning profits quickly. 2. Seeks income from his investment Seeks profit from trading of securities. 3. Risk is low Risk is high 4. Income is stable Profit is uncertain 5. Commitment is for a long term Commitment is for a short period. Write the differences between Public and Private sector. Public Sector Private Sector 1. Service motive Profit motive 2. Unlimited resources - Limited resources 3. Checks concentration of economic power heads to concentration of Economic power

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Commerce E.M. Pg. No. 6

4. 5. 6. 7. 8. 12.

Develops those sectors which are neglected by the private sector Deserves nation wealth Brings balanced growth in backward area backward area Consumer welfare is protected Model employer

Develop those industries in which risk is less and returns is more. Exploitation of natural resources Do not establish industries Consumers are exploited Exploitation of employees

in

Explain the different kinds of speculators. Bull : * Expects rise in prices of securities. * Optimistic speculator Bear : * Expects fall in prices of securities. * Pessimistic speculator. Stag : * He is a cautious speculator. * Expects to sell the securities at premium * He is a premium hunter. Lame Duck : * A bear struggling to carry over the transaction. * Not able to get securities in time. What is Memorandum of Association? What are its contents? Name clause : In this clause the name of a company is mentioned. If it is a Public Limited Company it should end with the word limited. If it is a private limited company it should end with the word Private Limited. Situation Clause : The state in which a company has its registered office is to be stated here. Objects Clause : It states the activities of the company. It lays down the maximum permitted range of activities. Liability Clause : This clause states that the liability of members is limited.

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20 marks 1. Explain briefly the principles of organization. Principles of organization : Unity of objectives Division of work Span of control Scalar principle Unity of command Functional Definition Unity of Direction Co-ordination Delegation of Authority The principle of Responsibility 1) Unity of objectives

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Commerce E.M. Pg. No. 7

The term objective means a goal to be achieved. 2) Division of work The total work should be divided. This is known as departmentation. 3) Span of control An executive should be asked to supervise a reasonable number of subordinates. 4) Scalar principle Line of authority must proceed from the highest executive to the worker at the bottom level through a downward flow. This is known as Chain of command. 5) Unity of command Each individual should receive orders from only one boss. 6) Functional Definition The authority and responsibility of every individual should be clearly defined. 7) Unity of Direction There must be one head and one plan for a group of activities directing towards the same objectives. 8) Co-ordination The various activities of undertaking should be co-ordinated to secure the desired results. The purchase department and sales department activities must be well co-ordinated. 9) Delegation of Authority Delegation means the entrustment of part of the work or some duties to the subordinates. 10) The Principle of responsibility The superior should be held responsible for the acts of his subordinates. 2. Describe the various types of business organization. Various types of business organisation. Individualistic Institutions Government Institutions 1. Sole trader 1. Departmental undertaking 2. Joint Hindu Family 2. Public corporation 3. Partnership 3. Government company 4. Joint Stack company 4. Board organization 5. Co-operatives 6. Multi national companies 1) Sole Trader Any business unit which is owned and controlled by a single individual is known as a sole trading concern. 2) Joint Hindu Family Joint Hindu Family do the business under the control of the head of the family. The head of the family is known as KARTA. The members are called coparceness. 3) Partnership The partnership is formed as a result of an agreement between two or more persons. 4) Joint stack company A company is an artificial person created by law having a common seal the perpectual succession. 5) Co-operative society

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Commerce E.M. Pg. No. 8

3)

A co-operative society is a voluntary association of persons. Service is the primary motto of a co-operative. 6) Multinational companies A multinational company is a company carrying on business in two or more countries. Ex. : Philips, IBM. Government Institutions 1) Departmental Undertaking. Departmental Undertaking may be run either by central government or by state government. Ex. : Railways 2) Public corporation This is established under a specific statute passed in the parliament. Ex. : Reserve Bank of India. 3) Government company It is a company in which not less than 51% of paid up share capital is held by the central (or) state government. Ex. : BHEL, SAIL. 4) Board organization : In this organization management is carried on by a government nominated independent Board. Ex. : Tamilnadu Electricity Board. Explain the main characteristics of sole Trading. Features of a Sole Trading. 1) One man ownership and control 2) Capital contribution 3) Unlimited Liability 4) Enjoyment of Entire Profit 5) No special Legislation 6) Registration 7) Duration 8) Simplicity 9) Local Business 10) Small capital 1) One-man ownership and control A Sole Trading concern is owned by an individual. 2) Capital contribution In sole tradership, the capital is employed by the owner himself from his personal resources. 3) Unlimited Liability The liability of the proprietor is unlimited. 4) Enjoyment of Entire profit The sole trader is entitled to enjoy all profits and should bear the entire loss of the business. 5) No special Legislation Sole tradership is not governed by any special legislation. 6) Registration A sole trader business need not be registered. 7) Duration

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The life of sole trader business depends upon the life of the sole trader. Anything which affects the personal life of a sole trader affects his business also. 8) Simplicity It is simple to commence and simple to close a sole trader business. 9) Local Business Most of the sole trading business confine only to a particular place such as a street, a block or a village. 10) Small capital A sole trader business can be commenced with a small amount of capital. Explain the role of sole trading form of business. Role of sole trader in the society. 1) Solution to unemployment problem 2) Provide Investment Avenues 3) Provision of goods at low price 4) Helps small producers 5) Supply of Quality goods 6) Philanthrophic Activities 7) Equal distribution of Income and Wealth 8) Helpful to consumers 1) Solution to unemployment problem Sole trader business organization gives large employment opportunities to the less educated and uneducated persons. 2) Provide Investment Avenues Sole trader organization provides a chance for small investors. 3) Provision of goods at low price. Goods are sold by sole traders at a lesser price. 4) Helps small producers M small local producers are benefited by the sole traders. 5) Supply of Quality goods Sole traders sell goods of high quality nowadays to maintain their reputation. 6) Philanthrophic Activities Sole traders undertake a number of social welfare activities such as conducting eye camps, maintaining parks, provision of basicades on the roads, supplying furniture to schools etc. 7) Equal distribution of Income and Wealth Equal Distribution of Income and Wealth is ensured as there are more entry of sole Proprietors in trading activities. 8) Helpful to consumers The sole traders supply the goods to the consumers at their door steps. So the time and energy of the consumers are saved. What are the circumstances under which a partnership is dissolved? 1) Dissolution by Agreement A partnership is created and dissolved by an agreement. 2) Compulsory dissolution A firm is compulsory dissolved either the insolvency of all the partners or the object of the firm unlawful.

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Commerce E.M. Pg. No. 10

3) Dissolution on the happening of certain contingencies. a) Death of a partner b) Expiry of the time c) Completion of the venture d) Adjudication of a partner as an insolvent 4) Dissolution by notice of partnership at will Any partner by giving a notice in writing the firm may be dissolved. 5) Dissolution through court. a) Partners Insanity If any partner becomes insane, the court may order for dissolution. b) Permanent Incapacity When a partner becomes permanently incapable of doing business the court may order dissolution. c) Persistent Breach of Agreement If a partner persistently violates the agreement the firm may be dissolved. d) Mis conduct of a partner If any partner is guilty of misconduct then any partner can file a suit for dissolution. e) Transfer of share When a partner transfers his share in the business then the firm may be dissolved. f) Continuous loss When the business cannot be carried on except at a loss, the court order for dissolution. g) Just and equitable grounds. When the court feels that it is just and equitable, it may order for dissolution. 6. Explain the rights and duties of partners. Rights of partners 1) Right to take part in the conduct and management of the business. 2) Right to expression opinion. 3) Right to the consulted. 4) Right to be inspect and take copy of books of account and records of the firm. 5) Rights to an equal share in the profits. 6) Rights to receive interest on loans and advances. 7) Right to indemnified for the expresses incurred. 8) Right to use the assets of the firm for its business. 9) No new partner can be admitted without the consent of their partners. 10) Right to retire from the firm. Duties of partners 1) Act diligently and honestly in the discharge of his duties. 2) Act in a loyal and faithful manner towards each other. 3) Act within scope of the authority entrusted to him. 4) To share the losses. 5) Every partner must identify the firm against loss sustained due to his willful negligence. 6) No partner can transfer his intrest. 7) Every partner must maintain and render true and correct accounts of the firm. 8) No partner can engage himself in a business which is likely to compete with the firm. 9) Every partner should use the firms property only for the firms business and interest.

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Commerce E.M. Pg. No. 11

10) No partner can make any secret profit. 7. Bring out the distinction between a company and a partnership. Partnership Joint stock company 1. The Act Companies Act 1956 Indian Partnership Act, 1932 Optional Minimum 2 Maximum Banking Business 10 Non Banking 20 Compulsory Private limited Company Minimum 2 Maximum 50 Public Limited Company Minimum 7 Maximum Limitless Limited Liability In a Public Limited company shares are fully transferable. Stable Many legal formalities. Mobilizing large resources. Audit is essential.

2. Registration 3. Number of members

4. Liability 5. Transfer of shares

Joint and Several Cannot transfer

6. Stability 7. Procedural Complexities 8. Financial Resources

Not stable Procedures are simple Capital contribution limited Not compulsory

9. Audit 10. Dissolution Partnership can be mutually Legal formalities for winding up are many dissolved at any time.

8. Distinguish between shares and debentures. Basis of Difference Shares 1. Rights 1. Share holder is a real owner of the company 2. Payment of Profit 2. Dividend is paid from the profit only 3. Level of Profit 3. The rate of dividend is changeable 4. Approval 4. Need Board approval for paying dividend 5. Payment of 5. Dividend is an appropriation returns of profit 6. Liability 6. Share holders liability is limited

Debentures 1. Debenture holder is only a creditor of the company. 2. Interest is payable at stated intervals regardless of profit or loss. 3. A fixed rate of interest is payable 4. The question of getting approval does not arise 5. Interest is a charge on the profit. 6. There is no such liability

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Commerce E.M. Pg. No. 12

7. Issue of Discount 8. Charge on assets 9. Return of capital 10. Participation in meetings

7. Issued at discount only under certain conditions 8. Shares have no charge on the assets of the company 9. Shares are non-repayable 10. Shareholders can participate in the company meeting and to vote.

7. There is no restriction 8. Debentures are generally secured. 9. Debentures are redeemable 10. Debenture holders are not entitled to attend meetings.

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Explain important features of co-operative organization. 1) Voluntary organization : A co-operative society is a voluntary association of persons. A person can join a co-operative society whenever he likes and leaves it whenever he wants. 2) Equality : In a co-operative society all persons are equal. Its members have equal rights and more capital does not provide more rights to an individual. 3) Democratic Management : Co-operative societies are managed on democratic lines. Every member has only one vote irrespective of the number of shares held by him. 4) Spirit of service : The objective of co-operative organsiation is that the service is primary and profit is secondary. 5) Plural Membership : A minimum of 25 persons are required to form a co-opeartive society. There is no limit on the maximum membership. 6) Finance : The capital of co-operative society is divided into many shares of equal value. A person becomes a member by purchasing its shares. 7) Local membership : Generally, in any co-opeartive society people from the particular locality become members. This is because only people in a particular locality can have a common economic problem. 8) Mutual Help : The main principle of co-operative organisation is the mutual help. Every member of the society is expected to help himself and also help every other member. 9) Statutory Audit : The Government inspects the activities and the accounts through co-operative audit department. 10) Cash Trading : Credit transactions are not permitted in the societies. The entire trading is carried on cash basis. Distinguish between Joint Stock Company and co-operative society. Basis distinction Joint stock company Co operatives society 1. Meaning It is mained organized for making profit service in primary object 2. Minimum number private company 2 minimum number of members Public company 7 is 25

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Commerce E.M. Pg. No. 13

Private company -50 no limit Public company no limit 4. Registration company is formed and registered co operative society registered as per the companies act 1956. as per the co operatives act. 5. Rights to vote one share one vote principle is one man one vote principle is followed is followed 6. Importance money is more important than a man man is more important than Money 7. Transfer of shares shares are freely transferable A member can surrender his Shares 8. Value of shares value of shares is generally greater shares are offered only at par Sell shares either at par or at a value Premium or at a discount. 9. Facilities Government do not provide any Concession co- operative society enjoys Concessions 10. Local membership members belong to different members belongs to the same Parts of the country locality ____________

3. Maximum number

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Commerce Choose the best answer: What is the advantage of sole proprietor ship a. small capital b. hasty decision c. limited capital d. limited managerial ability Partnership may come into existence a. by the operation of law b. by an express agreement c. by an express or implied agreement d. by inheritance of property Registration is compulsory in the case of a. a sole trader b. a partnership c. a joint stock company d. a joint hindu family business The most suitable form of organisation for operating defence industries is a. Government company b. public corporation c. departmental organisation d. board organisation A multinational company is also known as a. global giant b. partnership c. co - operative society d. public corporation Sole trading business can be started by a. at least two persons b. at least seven person c. any one person The liability of a sole trader is a. limited only to his investment in the business b. limited to total property of the business c. unlimited One man control is the best in the world This statement is given by a. H. Haney b. William R. Basset c. Neil H. Jocoby d. The direction of government A partnership is formed by a. agreement b. relationship among person c. The direction of government The basis of partnership is a. utmost good faith b. money available for investment c. desire to work together A partnership firm may be registered under a. 1949 act b. 1956 act c. 1932 act In partnership there exists a relationship of a. principal and agent b. owner and servant c. employer and employee Registration of partnership is a. compulsory b. optional c. not necessary The minimum number of members for a public limited company a. 2 b. 3 c. 7 d. 10 The liability of shareholders of a private limited company is limited to a. The paid up value of the shares b. amount remaining unpaid on the shares c. the extent of private assets d. amount called up The existence of a company comes to a close a. on the death of all its promoters b. on death of all the directors of the board c. on transfer of shares, by most of its original members d. none of the above The minimum subscription specified in the prospectus must be received with in a. 90 days b. 120 days c. 130 days d.60 days Table A of the companies act is a a. model of minutes book b. model form of balance sheet c. model of articles of association d. model of memorandum of association Debenture holders of a company are its a. creditors b.members c. credit customers d. borrowers Every partner has the right to receive interest on loan and advances at the rate of ____% per annum a. 6% b.10% c. 12% d. no interest

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21.

22. 23.

24. 25.

26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39.

40.

Shares can be forfeited for a. non - payment of any debt due to the company b. non attending three annual general meetings consecutively c. for non payment of cell money d. for violent activities at the annual general meetings. A person can hold directorship of not more than _____ public limited companies. a. 10 b. 15 c. 20 d. limitless A company secretary is appointed by a. Government b. the institute of company secretaries of India c. The board of directors d. shareholders in annual general meetings The list of business to be transacted at the meeting is called a.agenda b. minutes c. resolution d. quorum First directors are appointed by a. members in statutory meeting b. members in the first annual general meeting c. by being named in the articles of association d. registrar of companies The interval between two annual general meetings shall not be exceed a.15 month b. 12 month c.18 month d. 20 month Which of the following must hold a statutory meeting? a. statutory companies b. private limited cos c. public limited companies d. chartered companies The first issues are floated in a. primary market b. secondary market c. commodity market d. regulated market An optimistic speculator is a. bull b. bear c.stag d. lame duck Securities contract regulation act was passed in a. 1952 b. 1956 c.1964 d. 1954 Stock exchanges deal in a. goods b. services c. financial securities d. countrys currency Number of recognised stock exchange in India a. 2 b. 21 c. 22 d. 24 A pessimistic speculator is a. stag b. bear c. bull d. lame duck A bull operator believes in a. increase in prices b. decrease in prices c. stability in prices d. no change in prices A cautious spectator is known as a. stag b. bull c.lame duck d. bear SEBI has the following number of members including chair man a. 5 b. 7 c.6 d. 8 Co - operative society can be started a. only at villages b. it towns and villages c. only in cities d. only in urban areas The minimum number of members required to form a co - operative society is a. 2 b. 9 c. 100 d. 25 Dividend is declared in a co - operative store to its members a. share capital b. number of shares purchased c. amount of patronage given d. none of the above Central co - operative bank is established at a. villages b. districts c. state head quarters d. urban areas

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41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. 54.

55. 56.

57. 58. 59. 60. 61.

A co - operative supermarket supplies a. credit b. service c. goods d. cash Consumer co-operation was first successful in a. England b. USA c. Swiss d. India Minority interest can be protected in a. sole trader b. partnership c. co - operative society d. public company In a government company the share capital of the government must not be less than a. 51% b. 60% c. 75% d. 90% Public corporations are managed by a ______ nominated by the government a. Board of directors b. Government servants c. directors d. committee of directors In a public corporation the management has a. limited freedom b. no freedom of action c. controlled freedom d. unrestricted freedom of action This organisation has Tax concession a. Departmental organisation b. Co-operative Society c. Government Company The overall maximum managerial remuneration in a Public Limited Company shall not exceed a. 11% if net profits b. 11% of paid up capital c. 5% of Net profits d. 5% of paid up capital Jobbers transact in a Stock Exchange a) For their clients b. For their own transaction c. For other brokers d. For other members Government companies are registered under a. Special statute of Government b. Companies Act 1956 c. Royal Charter d. Other of the Government Which of the following is not the characteristics of sole proprietorship a) Single ownership b. One man control c. Whole profit to proprietor ship d. non flexibility The agreement of partnership a. Must be oral b. must be writing c. must be writing in the stamp paper d. can be either oral or in writing Membership by birth is main feature in a. Sole Trader b. Joint stock company c. Joint Hindu family business d. Partnership In a co-operative society a. One share one vote principle to followed b. One man one vote principle is followed c. A member must have 2 votes d. Shares are transferable. Co-operative society can be started a. only in villages b. in towns and villages c. Only in cities d. Only in state head quarters Management of a joint stock company is entrusted to a. The Registrar of companies b. The Board of Directors c. The share holders d. The Debenture holders The oldest form of business organisation a. Sole Trading b. Partnership c. Joint stock company d. Co-operatives Decision making process in sole trading business is a. Quick b. Slow c. Neither quick nor slow Sole proprietorship is suitable for a. Large scale concerns b. Medium scale concerns c. Small scale concerns ________ described as an extension of the Principle of Agency a. Partnership b. Sole Trading c. Joint stock company d. Co-operatives Sleeping Partner is also known as a. Active Partnerb. Dormant Partner c. Nominal partner d. Sub Partner

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62. 63. 64. 65.

66.

67.

68.

69.

70.

71. 72.

73.

74. 75. 76.

77.

The maximum number of member for non-banking firm is ______. a. 2 b. 10 c. 20 d. 30 The partnership partners are collectively ______. a. firm b. family c. company d. co- operative Which of the following is created by a special act of parliament or in state assembly a. chartered company b. foreign company c. Government company d. statutory company A private company can commerce business a. immediately on receiving the certificate of incorporation b. only after the certificate of commencement of business c. on getting name of approval from the registrar d. on filing all the documents necessary for formation with the registrar. Which of the following companies must file with the registrar a statement of lieu of prospectus? a. a public limited company which raises funds from the public through issue of shares. b. a public limited company which has made arrangement for raising its capital from directors and their relatives c. a private limited company d. all of them Where the shares are issued at a discount and the nominal value of share is Rs. 100, the maximum discount that can be allowed is a. Rs. 5 b. Rs. 10 c. Rs. 20 d. Rs. 15 Which of the following document define a scope of a companys activities? a. memorandum of association b. articles of association c. prospectus d. statutory declaration A preference share has priority in a. dividend only b. only in return on capital at the time of winding up c. voting rights d. both dividend and return of capital on winding up A company should compulsorily appoint a qualified company secretary, compulsorily having a paid up share capital of more than a. Rs. 5 lakhs b. Rs. 50 lakhs c. Rs. 25 lakhs d. Rs. 15 lakhs A partner who contributes capital and takes active part in the management is known as ______. a. sleeping partner b. nominal partners c. managing partner d. partners in profit only Debenture holders are entitled to receive interest in the following circumstances a. when there are profits b. when share holders also get dividend c. every year irrespective of loss d. all the above A director is acting as a. agent of the company b. trustee of the company c. chief executive officer of the company d. all of these The value of qualification shares of a direction in a public limited company shall not exceed a. Rs. 5000 b. Rs 50,000 c. Rs. 5,00,000 d. Rs. 500 _______ is run on the principle of All is he and he is all in all. a. the sole trading concern b. partnership c. joint hindu family d. co - operatives Which of the following business is not transacted at the annual general meeting. a. appointment of auditors b. issue of debentures c. appointment of directors in place of those retiring d. declaration of dividend The popular method of sale of new shares in India in a. public issue b. offer for sale c. managing brokers d. underwriting

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78.

79.

80. 81.

82. 83.

84. 85.

86. 87. 88. 89. 90. 91. 92. 93. 94. 95. 96. 97. 98. 99. 100. 101. 102. 103. 104. 105. 106. 107. 108. 109.

Stock exchange allow trade in a. all types of shares of any company b. bands issued by the Government c. listed securities d. unlisted securities SEBI in formed as per a. securities contracts ( Regulation) Act b. securities and exchange board of India act c. companies act d. Indian constitution Stock exchange _______ speculation in shares a. does not allow b. discourage c. encourage d. prohibits A stock exchange is a place to a. exchange one security for another b. buy and sell financial securities c. float new shares d. buy and sell stock of goods Maximum membership in a co- operative society is a. 50 b. 60 c. 100 d. unlimited Public can also subscribe to the share capital of a. public corporation b. departmental undertaking c. Government company d. none of these For the efficient working of state enterprise the form of organisation generally considered suitable is a. departmental organisation b. public corporation c. Government company d. none of these Indian telephone industries is the examples of a. departmental organisation b. public corporation c. Government company d . none of these Fill in the blanks: Life insurance corporation of India is the example of _______. The liability of sole trader is ________. A sole proprietorship concern is generally run on a ______ scale basis. Person who enter into partnership are collectively called __________. The maximum number of members in non - banking firm is ______. The partners liability in India is ______. _______ means the termination of the original partnership agreement. The minimum number of members in a private company is _______. An advertisement inviting the public to buy the debenture of a public limited company is known as _____. First directors are usually named in the ______. Directors act as ______ trustees and officers of the company. Altering the articles of association requires ______ resolution. Auditors are generally appointed and their remuneration fixed at the _______ meeting. Debentures denotes ______ interest. Secondary market deals with _____ traded in primary market. BOLT is the online trading system in use at _____ stock exchange. The latin word co - operative mean _______. Management of co - operative society is fully _____. Exploitation of consumers and employees is a feature of ______. The primary aim of state enterprises is _____. Division of work is called ______. Broadcasting comes under ______ form of organisation. TamilNadu electricity board is the example of ______. Public corporation is also known as _______.

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110. A partner who does not take part in the working of the firm is called _____ partner. 111. An unregistered firm cannot enforce its claims against third parties for recovering a sum exceeding rupees ____. 112. ____ is a right vested with a partner to be used in emergency situation to protect the interest of the firm. 113. The liability of a member of a company limited by guarantee is _____. 114. The company which need not have separate articles of association of its own is ____ company limited by shares. 115. The aggregate nominal value of qualification shares shall not exceed ______ rupees. 116. Shares at a discount must be issued within _____ months from the date of sanction by the central Government . 117. A person appointed to attend a meeting on behalf of a share holder is known as ____. 118. The overall managerial remuneration in a public limited company shall not exceed ____ % of net profit. 119. The quorum for a general meeting of members of a public company is ____. 120. ____ act as intermediary to float new shares. 121. Application money should not be less than _______ percent of the value of a share. 122. Cleared securities are also called ________. 123. ______ are the employees of the members of a stock exchange. 124. _______ act as a substitute for initial public offering . 125. The father of the co- operative movement was _____. 126. Super market refers to large scale______. 127. Service is the main objective of ______. 128. In co- operative society only _____ of the profits to be distributed as dividend. 129. Public corporation are created by ______ central or state Government. 130. The oldest form of public enterprise is ____. 131. Public corporations are managed by a ______ nominated by the Government. 132. In a Government company atleast _____ shares are owned by the Government. 133. The most suitable form of organisation for manufacturing defence goods is ________. 134. Minimum subscription is fixed at ____ of the issued capital. 135. Ready delivery contracts are also called as ______. 136. Delegation means the ____ of part of the work. 137. Partners share profits and losses____. 138. In India registration of partnership is ______. 139. A company is regarded as a ______. 140. Government policy is also favourable towards ______. 141. Government company employees are not ______. 142. In co - operative society all members are ______. 143. _____ acts as a stimulant for hard work in sole trading business. 144. Coco cola corporation is the example of _____. 145. The profit and loss of a partnership firm is shared in the _____ among the partners. 146. Active partner is also known as ______. 147. A partnership is formed by _______. 148. ______ is a person who has not completed 18 years of age. 149. _____ can keep his business secrets. 150. Sole proprietor ship in suitable for _____. 151. The partnership agreement is also known as ____.

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152. Where the ______ partnership can be terminated, if any partner notifies his desire to quit. 153. ______ is a temporary partnership which is formed to complete a specific venture or job during a specified period. 154. When a person makes an arrangement with a partner to share his profit, he is known as a _____. 155. A partnership in which the liability of a partner is limited is called ______. 156. ______ability of a sole trader is limited. 157. In partnership the name under which the business is carried on is called ______. 158. ______ is not governed by any special legislation. 159. ______ mean dissolution of partnership. 160. General partnership is also known as ______. 161. Sole trading business can be started by _____ person. 162. ______ document define the scope of activities of a company. 163. A private company should have atleast directors. 164. Preference shares which carry a right to arrear divided are known as _____. 165. When a company has issued shares of qualification shares that a director should hold is _____. 166. The minimum number of members in a public limited company is _______. 167. East India company is the example of ______ 168. Share holders are the _____ of the company . 169. When the shares are issued at a price higher than its face value, it is called _____. 170. Where debentures are to be redeemed after a specified period, they are known as _______. 171. The forfeited shares can be reissued at a ______. 172. Every public limited company must compulsorily hold statutory meeting within______ month and not earlier than _____ month form the date to commence business. 173. The interval between two annual general meetings shall not exceed ____ month. 174. The notice calling the annual general meeting must be given to all its members at least _____ days before the date of the meeting. 175. A statutory report must be sent to every member of the company atleast _____ days before the meeting is to be held. 176. The minimum number of members required for a meeting is known as _____ 177. A person cannot act as a managing director of more than _____ companies at a time. 178. _____ means 51% or more of the votes have been cast in favour of the resolution. 179. Joint stock companies require _____. 180. _____ is a document issued by a company acknowledging a debt due by it to its holders. 181. _____ is a commonly used method of issuing new shares. 182. _____ is an invitation to the public to subscribe of the shares. 183. The volume of business in secondary market depends on _____. 184. There are _____ regional stock exchanges in India. 185. Listing is _____ for public companies. 186. _____ order gives a freehand to its brokers of a client to buy or sell a particular se??? for any price. 187. Investors retains securities for _____ period. 188. Stag is called _____. 189. _____ enables small investors to participate in the investment on share capital of large companies. 190. Large scale undertakings are originated in the form of _____.

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191. The long term capital required by the company is divided into small units of fixed amount called _____. 192. Primary market is concerned with _____. 193. _____ act as intermediary of float new shares. 194. After allotment of shares, allottes become the _____ of the company. 195. Second hand securities are traded in _____. 196. Inclusion of securities in the official list of stock exchange is called _____. 197. _____ are the employees of the members of a stock exchange. 198. _____ is the supervisory body established to regulate Indian stock market. 199. _____ is known as stag. 200. The liability of the members of a co-operative society is _____. 201. An industrial co-operative is organised by _____. 202. consumers are the _____. 203. Agriculture credit societies are classified into a) Rural credit society b) _____. 204. When the Government takes over an existing private concern it is called _____. 205. Exploitation of consumers and employees is a feature of _____. 206. _____ is an undertaking owned and controlled by Government. 207. _____ Checks concentration of economic power in the hands of few. 208. Where the authority to a partner is expressly conferred by an agreement, it is called _____. 209. The person who contributes capital and manages the business is called as _____. 210. The size of sole trading business remains _____. 211. When a proposal placed before the meeting is passed by the meeting, it becomes _____. ***** 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. Limited Capital By an express agreement A Joint Stock Company Departmental Organisation Global Giant Any one person Unlimited William R. Basset Agreement Utmost good faith 1932 Act Principal and agent Optional 7 amount remaing unpaid on the shares None of the above 90 days Model of articles of association Creditors 6% For non payment of call money 15 The Board of Directors
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ANSWERS 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46.

Agenda By being named in the Articles of Association 15 months Public Limited Company Primary Market Bull 1956 Financial Securities 21 Bear Increase in prices Stag 6 In towns and villages 25 Amount of patronage given Districts Goods England Co-operative Society 51% Board of Directors Controlled freedom

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47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60. 61. 62. 63. 64. 65. 66.

67. 68. 69. 70. 71. 72. 73. 74. 75. 76. 77. 78. 79. 80. 81. 82. 83. 84. 85. 86. 87. 88. 89. 90. 91. 92. 93. 94.

Co-operative Society 95. articles of association 11% of net profits 96. agents For their won transaction 97. special Companies Act, 1956 98. Annual General Non - flexibility 99. creditorship Must be writing in the stamp paper 100. resale of securities Joint Hindu family business 101. Mumbai one man one vote principle is followed 102. to work with in town and villages 103. democratic The board of Directors 104. Private sector Sole trading 105. Public welfare Quick 106. Departmentation Small scale concerns 107. Departmental Partnership 108. Board Organisation Dormant Partner 109. Satutory corporation 20 110. sleeping partner Firm 111. One hundred Statutory company 112. Implied Authority immediately on receiving the certificate of113. limited incorporation 114. Public a Public Limited Company which has made115. 5000 arrangement for raising its capital from directors116. 2 and their relatives 117. Proxy Rs. 10 118. 11% memorandum of association 119. 5 both dividend and return of capital on winding up 120. Issue house Rs. 50 lakhs 121. 5 % Managing partner 122. Securities on forword list all the above 123. Authorised clerks All of these 124. Mutual funds Rs. 5000 125. Robert owen The sole trading concern 126. retailing issue of debentures 127. Co-operatives Public issue 128. 14 % Listed securities 129. special act Securities and Exchange Board of India Act 130. Departmental organisation encourage 131. Board of Directors buy and sell financial securities 132. 51 % Unlimited 133. Departmental Organisation Government company 134. 90 % Public corporation 135. Spot contracts Government company 136. entrustment Public corporation 137. in an agreed ratio unlimited 138. Optional small 139. Person by law Firm 140. Multinational companies (MNCS) 20 141. Government servants Unlimited 142. equal Dissolution of partnership 143. Fear of loss 2 144. Multinational Company (MNC) prospectus 145. agreed ratio

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146. 147. 148. 149. 150. 151. 152. 153. 154. 155. 156. 157. 158. 159. 160. 161. 162. 163. 164. 165. 166. 167. 168. 169. 170. 171. 172. 173. 174. 175. 176. 177. 178.

Managing partner (or) working partner agreement A minor A sole trader small scale concerns Partnership Deed Partnership - at -will A joint venture subpartner limited partnership The managerial Firm name Sole trading Dissolution of firm Unlimited partnership any one Memorandum of association 2 cumulative preference shares One 7 Chartered company real owners Issue of shares at a premium Redeemable debentures discount 6 months, one month 15 21 days 21 days Quorum 2 Ordinary resolution

179. 180. 181. 182. 183. 184. 185. 186. 187. 188. 189. 190. 191. 192. 193. 194. 195. 196. 197. 198. 199. 200. 201. 202. 203. 204. 205. 206. 207. 208. 209. 210. 211.

Enormous Capital Debenture Public issue Prospectus Primary market 21 compulsory Discretionary order Longer Premium Funds Mutual Funds joint stock company shares issue of new shares Issue Houses share holders Secondary market Listing Authorised clerk SEBI Cautious Speculator Limited small scale producers Kings Primary credit societies nationalisation Private sector State enterprise Public sector Expressed Authority Sole trader small a resolution

****

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Accountancy

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Accountancy Volume - I Lesson - I


I. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. Fill in the blanks: Net profit is transferred from profit and losss account to ____ account. Closing stock is valued of cost price or _______ price which ever is lower. Outstanding expenses are shown on the _____ side of the balance sheet. Prepaid expenses are shown on the _____ side of the balance sheet. Income accured but not received will be shown on the ____ side of the balance sheet. Income received in advance will be shown on the side of the balance sheet. Interest on capital is debited in _____ account. Interest on drawings is gredited in _____ account. Interest on loan borrowed unpaired is shown on lthe side of the balance sheet. Depreciation is deducted from the concerned _____ in the balance sheet. Provision for bad & doubtful debts is deducted from _____ in the balance sheet. Provision for discount on creditors is deducted from _____ in the balance sheet. Debts which are not recoverable from sundry debtors are termed as ________. Returns in wards are ______ deducted from. The profit and loss account _____ or ______ shows. Rent out standing is ______. Closing stock is shown in _____ and _____ . Opening stock is shown in _____ account. Gross profit is transferred to _____ and _____. Interest on capital is added to ______ account. Interest on drawing is deducted from _____. Outstanding interest on loan borrowed is to be added to _____ A/C. All the items given in the adjustment will appear at _____ at the final accounts. 31. 3. 2004 as on bad debits at 5% on Rs.______. Trial balnce as on 31. 03. 2005 shows bank loan Rs 1,00, 000 at 10% per annum on 01.04.2004. Interest paid Rs 4000 interest outstanding is ______. Trial balance shows investment Rs. 1,25,000 @ on 31.3.2004 Interest received is as 15,000. Accured interest is ______ on. Trial balance shows investment 2,00,000 @ 10.1.on 31.3.2005. Interest received is Rs. 1,500 . Accured interest is ______ on Trial balance as on 31.3.2004 sundry creditors Rs. 25,000 2% discount on sundry creditors Rs ____ on 1.4.2005. Trial balnace as on capital Rs. 6,00,000 per year interest on capital Rs _____. Trial balance shows sundry debtors Rs 2,00,000 31.12.2006 write of bad debts Rs 20000 provide 20% bad and doubtful debts the amount of provision for bad and doubtful debtors is ______. Chapter - 2 Fill in the blanks: Incomplete records are those records which are not kept under _____ system. Statement of affairs method is also called as ______ method. ______ capital can be found by preparing a statement of affairs at the beginning of the year. A statement of affairs resembles a _______. Closing capital can be found by preparing a statement affairs at the _____ of the year.

I. 1. 2. 3. 4. 5.

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6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. I. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.

I. 1.

In the single system, only personal and _______ are opened. Credit purchase can be ascertained as the balancing figure in the _____. The excess of assets over liabilities is ______. The total assets over liabilities is ________. A firm has assets worth Rs 60,000 and capital Rs 45,000 it is liabilities is ______. Incomplete records are generally used by _____ traders. Gredit sales is obtained from ______ accounts. Single entry system is __________. The capital of a business is ascertained by preparing _______. ______ calculate prfit it is approximately. Statement of affairs calculate to the profit basic two date between _____. As on 01.April .2003 - sundry creditors Rs 8000, 2003 - march 31 sundry creditors Rs 13,500. This year credit purchase is ______. The company closing capital Rs 20,000 drawing Rs 5000, additional capital Rs7,000, profit Rs 3000 shown opening capital is _________. Trial balance as on sundry creditors Rs 30,000 give the adjustment discount on sundry creditors at 2% entry of the balance shet shown in sudry amount creditors_______. A form has capital Rs 1,50,000 and liabilities Rs 2,80,000. Then its assets is ______. Chapter - 3 Fill in the balnks: All assets whose benefit is derived fpr a _____ period of time are called as fixed assets. The estimated sale value of assets at the end of its economic life is called as _____ value. _____ method of depriciation is calculated on the original cost of assets. Under _____ method, depreciation is calculated on the book value of the assets each year. ______ method of depreciation is used in the case of lease Under insurance policy method, cash is paid by way of every year. _____ method of depreciation is suitable for special type of assets like loose tools. Under straingth line method, rate of depreciation is calculated on ______-. Under dimishing balance method, depreciation _____ every year. The term deptetion is used for ______ assets. If selling price is more than the book value of the assets on the date of sale, it is _______. If selling price is less than the book value of the assets it denotes _______. Profit made on sale of fixed assets is debited to _______. Loss on sale of fixed assets appear on the _______ account. The amount of depreciation charged on machinery will be debited to _____ A/ C. Total amount of depreciation provided on the written down value method at the rate of 10% pa on Rs 10,000 for the first three years will be _____. Total amount of depreciation is provided on the straight line method at the rate at 10% p.a on Rs 3,00,000. For first three years back assets book value Rs ____on. The machinery sales at Rs 5,00,000 at profit Rs 50,000 the machinery book value at Rs_____. Total amount of depreciation provided on the written down value method at the rate of 10% pa on Rs 10,000 for the first three years will be ______. Chapter -4 Fill in the blanks: _____ is mathematical relationship between two item expressed in quantitative form.

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2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. I. 1. 2. 3. 4. 5. 6. 7.

Ratio helps in _____ fore casting. _____ Ratio measures the firm ability to pay off its current dues. ____ are those assets which are easily convertiable into cash. Bank overdraft is an example of _____ liability. Liquid ratio is used to assess the firms _____ liquidity. Liquid assets means current liabilities less _______and _____. _____ratio is modified form of liquid ratio. Liquid liabilities means current liabilities less _______. Proprietery ratio shows the releation shipe between _____ and total tangible assets. Gross profit can be ascertained by deducting cost of goods sold from ______. Stock turn over ratio is otherwise called as _______. 100% operating profit ratio is equal to _____ ratio. When total sales is Rs. 2,00 000 cash sales is Rs 65,000 then credit sales will be Rs ______. Liquid ratio is other wise known as _______. All solvency ratios are expressed in terms of ______. All activity ratios are expressed in terms of _______. All profiability ratio are expressed in terms of _______. Share holders funds includes ______. Gross profit ratio establishes the relationship between ______. Opening stock is equal to Rs 10,000 purchase Rs 2,00,000 and closing stock Rs 5,000. Cost of goods sold is equal to ________. Operating ratio is equal to _______. Total sales of a business concern is Rs 8,75,000. If cash sales is Rs 3,75,000 then credit sales will be ________. Total sales is Rs 3,40,000 and the gross profit made is Rs. 1,40,000. The cost of goods sold will be _____. Cost of goods sold is Rs 4,00,000 and average stock is Rs 80,000 stock turn over ratio will be ____. Current assets of a business concern is Rs 60,000 and current liabilities are Rs 30,000. Current ratio will be ________. Equity share capital is Rs. 2,00,000 reserves & scorplus is Rs. 30,000. Debenture is Rs. 40,000 and the share holders funds will be ______. _______ Ratio shows the number of times the capital has been rotated in the process of carriying business. Sales isRs 3,50,000. Capital empolyed is Rs 1,75,000 capital turnover ratio is ______. Land + Building + Furniture _______ Assets. Chapter -5 Fill in the blanks: The term cash in cash budget stands for _____ and ______. Cash budget is also called as _____. There are ______ methods by which a cash budget is prepared. The opening balance of cash in April is Rs. 1,270. Total receipts for the month are Rs. 4,300 and total payment amounted to Rs 3,750 opening balance of cash in May will be _______. Cash budget is a useful tool for _______. The closing balance of one month will be the _____ balance of the next month. Budget is an estimate relating to _______ period.

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8. 9. 10. 11. 12.

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24.

25. 26. 27. 28. 29. 30. 31. 32.

Cash budget ______ and ______ expressed in terms of. Cash budget deals with ______ and _____. Purchase of furniture is an examples for ______. Opening balance of cash in January Rs 9,000 the estimated cash receipts are Rs 14,000 and esti mated cash payment Rs 10, 000 the opening balance at February is ________. Opeing balance at cash in January Rs 15,000 the estimated cash receipts are 20,000 and estimated cash payment Rs 10,000 the opening balance of February is ________. Volume - II Chapter - 6,7,8 A sole trader business is owned and managed by _____ person. Indian partnership act was enacted in the year_______. Mutual and ______ agency is the essence of partnership. The profit and losses of the business will be shared among the partners in the ______ ratio. Under fluctuating capital mehtod, profitor loss in a year. Will be transferred to the respective ______ accounts. The capital accounts of partners may be ______ or flucturating. Under _____ capiatal arraangements, current accounts will not be maintained. The debit balance of the current account, will be shown in the _______ side of hte balance sheet. Interest on partners capital is allowed, only when the ________ specifically provides for it. Money lent to the business by a partner is Gedited to his account and not his capital account. Interest on parnters loan sholuld be paid, even if there is no __________ in a year. Good will is an _____ assets. The excess of average profit overnormal profit is ______. In the absence of partnership deed, no interest is to be changed on _______. A partnership can be formed only fora ____ business. The persons who entered into partnershp are collectively known as _____. The minimum number of persons in a partnership firm is _______. Ina partnership business , agreement is _______. In a partnership, partnership share their profit and losses in ______ ratio. Under fixed capital system, the profits losses of partners will be transferred to their _______ account. Interest on capital is calculate on the ______. Current accounts for partners will be opened under. In the absence an agreement proift and losses and divided_______. X and Y are partner sharing the profit and losses in the ratio of 2:3 with capitals pf Rs 1,20,000 and Rs 60,000 respectively profit for the year are Rs 9,000. IF the partnership deed in silent as to interest on capiatal show how proift is shared amount X and Y. Where a partners entitled to interest on capital such interest will be payable _______ Where a partners entitled to interest on capital such interest will be payable _______ Under fixed capital methods capital methods salary payable to a partner is reocorded _____. If a firm is maintaining both capital accounts and current accounts of the partners A and B additional capital introduced by B will be recorded in ______. Interesting drawing calculated ______ methods used. Current accounts credit of the balance sheet _____ side of entry. Amount drawn regularly at the beginning of every month during the year, interest is calculated for. Amount drawn regularly at the middle of every month during the year interest in calculated for.

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33. Amount drawn regularly at the end of energy month during the year interest is calculated for. Chapter - 8 I. Fill in the blanks: 1. The retiring partner should be paid off of the amount due to him, will be treated as his _____ to the firm. 2. At the time of retirement of partners stamd to ______. 3. If the value of liabilities decrease, its result in ______ item. 4. At the time of retirement, the increases in the value of good will will be transferred to the ____ side of thecapital accounts of all the partners. 5. At the time of retirement, the profit on revaluation of assets and liabilities will be tranfered to the_____ side of the capital account of the partners. 6. At the time of retirement the revaluation profits of business will be shared by _____ partners. 7. In the absence of any specific agreement between the partners, partners loan to the firms will carry an interest at the rate of ______ percentage. 8. The accumulated reserves will be transferred to the old partners capital amount in the ______ ratio at the time of his retirement. 9. The amount due on the retiring partners is either ______ or is paid in ________. 10. ________ is calculated to determine the amount of compensation to be paid by each of the continuing] partners to the outgoing partners. 11. A,B and C shares profit as to A 1/3 to B and 1/6 to C. If B retires then the new proift sharing ratio is _______. 12. Sacrificing ratio is the ratio in whichh the ole parnters caxisting? Have agreed tp sacrifice their _____ in favour of _______. 13. At the time of retirement of a partner, calculation of new profit ratio is ________. 14. Undistributed profit and losses _____ transferred to all the partners account at the time of retirement of partners. 15. At the time of retirement balance sheet, items like profit loss account and general reserve must be transferred to ________. 16. If the good will account is raised for 30,000 the amount is debited to _______. 17. ______ ratio is calculating by taking out the difference between new profit sharing ratio and old profit sharing ratio. 18. On retirement of partner goodwill amount is credited to the account of _______. 19. A,B and C are sharing profits in the ratio of 2/5:2/5:1/5 C retired from business and his share was purchased equally by A and B. Then new profit sharing ratio shall be _________. 20. When the amount due on outgoing partners is not paid immediately, then it is transferred to _____. 21. If the amount due to the outgoing partners is transferred to loan account then he is entired to interest at untill it is paid out. 22. Graming ratio is calculated at the time of _______. 23. A, B and C partners sharing profit in the ratio of ,1/3,1/6 A partners retired from business by B and C Then new profit sharing ratios calculated to _______. Chapter - 9 a. Fill in the blanks: 1. Companies have been defined in section _____ of the companies act, _______ 2. ______ is considered as the official signature of the company. 3. The management of a company is done by _______. 4. The liability of share holders are _____ in a company.

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5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39.

Audit of accounts are done by practicing chartered accounts who are appointed by ____ at the ____. _____ is the maximum amount of capital that can be issued by company. Nominal capital is the capital mentioned in the ______ of the company . The part of the authorised capital not offered for subscription to the public in known as _______. Reserve capital canbe issued only at the time of _______. A public issue can be kept open for more ______ days. Minimum subscription that should ne received by the company is ______ % of the issued capital. When excess application monely is adjusted towards allotment is called as ____ allotment. There should be a time gap of _____ between two calls. Capital Reserve represents _____ profit. Projected sheres have to be reissued at a price _____ than the face value. Securities premium is shown in the _________ side of the balance sheet. According to companies ( Amendment) Act 2000 a company limited by share can issue ____ kinds of shares. The public issue must be keep open for atleast _______. Minimum amount to be collected by a company as application money according to SEBI is ______% of the issue price. When more number of application are received than that are offered to the public it is called ______. The maximum calles that a company can make is _______. According to table A interest charged on calls - in - arrears is _________ According to table A, interest charged on calls in advance is _______. A company can issue shares _____. When the company issue shares at a price more than the face value it is called as an issue at _____. Normally companies can issue shares at _____ of discount. When shares are forefided the shares capital of the company will _____. Securities premium will appear in the ______ side of the balance sheet. The balance of forfeited share account it _______ in the balance sheet. Calls - in - arrears is shown inthe balance sheet as _______. Capital Reserve is shown on the _____ side of balance sheet. A company issued 2,00,000 shares of Rs 10 each to the public but only 1,50,000 shares were subscribed. Its subscribed capital_______. The directors of company forfeited 100 share of Rs 10 each on which the find call money Rs .3 was not paid. Later these shares were reissued for Rs 800 capital reserve will be _______. A company had authorised capital of Rs 4,00,000 divided into 4,000 shares of Rs 100 each. It offered 3,000 shares to the public. Its issued capital is ________. The directors of a company forfeited 500 shares of Rs. 10 each on which the final call money Rs. 2 was not paid later these shares were reissued at Rs 8 per shares capital reserve will be ________. ULTD issued 70,000 shares of Rs 10 fully subscribed by public Rs. 7 pershare has been called up. Then Rs _____ will represent un called capital. The amount credited to share forfeiture account is Rs 3,000. The discount on reissue of forfeited shares is Rs. 1,500 capital reserve will be_______. The company forfeited shares reissued at share at premium amount _______. A company reissued Rs 50,000 shares at Rs 10 each. Share Rs 2 issued to premium, at premium amout Rs _______.

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40. The company winding time at issued calls time called up capital and one part ______ calls. Answers Lessons - 1 3. Liability 7. Profit & loss a/c 11. sundry debtors 15. Net profit & Net loss 18. profit & loss a/c 22. loan A/C 26. Rs 6000 30. Rs 36000

1. Capital 2. Market 5. Assets 6. Liabilities 9. Liabilities 10. fixed assets 13.Bad debts 14. Sales 17. Trading a/c, balance sheet 20. Capital A/C 21.Capital A/C 24. Rs 1500 25. Rs 6000 28. Rs 500 29. Rs 36000

4. Assets 8. Capital 12. sundry creditors 16. Liabilities 19. profit & loss a/c 23. two 27. Rs 5000

1. Double entry 6. single entry 11. small trades 14. statement of affairs 19. 29 400

Lesson - 2 2. networth 3. opening 7. total creditors A/c 8. capital 12. total debetors accounts 15. single entry 16.capital 20. 4,30,000

4. Blance sheet 5. end 9. 1,50,000 10. 15000 13. in complete double entry system 17.36 500 18. 15000

1. long 5. annxity 9. Original cost 13. loss 17. Rs 2710

2. redidual value 6. premium 10.decreses every year 14. fixed asset a/c 18. Rs 2, 10,000

Lessons - 3 3. straight line 7. revaluation 11. natural resources 15. fixed asset a/c 19. 4,50,000

4. written down value 8. wear and tear of the asse. 12. profit 16. depreciation 20. Rs 1,45, 800

Lesson - 4 1. Ratio 2. finacial 3. liquid 4. current assets 5. current 6. short term 7. stock, prepaid expenses 8. absolute liquid 9. bank over draft 10.share holders fund 11. sales 12. inventory turnovev ratio 13. operation ratio 14. Rs 1,35,000 v 15. quicke ratio 16. proportion 17. time 18.percentage 19. reserve and surplus 20. Gross Proift & Total sales 21. 20,500 22. 100- operating profit ratio 23. 2,00,000 24.5,00,000 25. 5 items 26. 2:1 27. 2, 30,000 28. capital sales 29. two times 30. tangiable. Lesson - 5 2. finance budget 3. Three 6.opening 7. future 10. Estimate cash payments 12. Rs 25000

1. Cash - balanace bank balance 5. Finance planning 9. Estimate cash receipts 11. Rs 13000

4. Rs. 1800 8.money &physical units

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Lesson - 6 1.one 2. 1932 3. implied 4. agreed 5. capital 6.fixed 7. fluctuating 8. assets 9. partnership agreement 10. Loan 11.profit 12. Intansiable 13. super profit 14. drawing 15. legal 16. firm 17. two 18. not necessary19. agreed 20. current 21. opening capital 22. fixed capital 23. equal 24. Rs x = 3600 YRs 5400 25. capital 26. capital 27. current 28. B- capital 29.Averagemethod 30. liabilities 31. 13/24 32. P2/24 33. 11/24 Lesson - 7,8 3. profit 4. credit 5. credit 8. old profit sharing 9. paid off immediately instalments 12. incoming partners profit ratio 13. demant 16. goodwill 17. gaining ratio 18. all partners 21. 6% 22. dissolved 23. 2:1 Lesson - 9 1. sec 3(1) (i) 1956 2. common seal 3. board of director 4. limited 5. share holders annual general meeting 6. authorised 7. memorandum of association 8. unissued 9. winding up 10. 10 days 11. 90% 12. prorata / proportional 13. one month 14. capiatal 15. lesser than 16. liability 17. two 18. three 19. 25% 20. over subscription 21. threee 22. 5% 23. 6% 24. face value, premium discount 25. premium 26. 10% 27. reduce 28.assets 29. added to paid up capital 30. deducation from called up capital 31. liabilities 32. Rs 15,000 33. Rs 500 34. Rs. 3,00,000 35. Rs. 3000 36. 2,10,000 37. Rs 1500 38. capital reserve 39. Rs 1,00,000 40. Reserve capital ~~~~~~~~~~~~~~~

1. loan 6. all 10. gaining ratio 14. Transfered 19.A - 1/2, B 1/2

2. gaining 7. six 11. Bill 15. partners capital 20. Loan

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Accountancy
5 marks questions.
1. Answer the following: What is outstanding expense? Expense which have been incurred but not yet paid during the accounting period for which the final account are being prepared are called as outstanding expense. What is prepaid expense? Expenses which have been paid in advance are called prepaid expense. It is also called as unexpired expense. What is accrued income? Income which have been earned but not received during the accounting period is called assured income. What is income received in advance? Income received during a particular accounting period for the work to be done in future period is called as income received in advance. What is bad debts? Debts which cannot be recovered are called bad debts. It is treated as a lose for the business. Write notes on provision for bad and doubtful debts? If sundry debtors figure is to be shown correctly in the balance sheet provision for bad and doubtful debts must be adjusted. Write note on provision for discount on debtors? To motivate the debtors to make prompt payments cash discount may be allowed to them. After providing provision for bad and doubtful debts the remaining debtors are called as good debtors. So a provision for discount on good debtors at a certain percentage may have to be created. What is adjusting Entry? In a firm both expense and income has to adjust. If such item are not adjusted the final account will not reval the true and fair picture of the business performance. All such item which need to be brought into book of account at the time of preparing final accounts are called adjustments. Define Single Entry system? According to Kohler single entry system is a system of book keeping in which as a rule only records of cash and personal account are maintained. It is always in complete double entry varying with circumstances. What is statement of affairs? If is the statement of prepared to find out capital of a business under single entry system. It looks like a balance sheet.

2.

3.

4.

5.

6.

7.

8.

9.

10.

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11.

What is conversion method? If is desired to calculate profit by preparing trading and profit and loss account under single entry then it is called conversion method. What are the limitation of single entry system? Trial balance can note be prepared Difficults to local frauds What are the features of single entry? Suitable for sale trading and partnership firms Only personal accounts and cash account are kepts True financial position can not be ascertained Not accepted by Tax authorities Define Depreciation? Carter defines depreciation as the gradual and permanent decrease in the value of an assets from any causes. Write notes on revaluation method of depreciation? Under this method, the assets like loose tools are revalued at the end of the accounting period and the same is compared with the value of the assets at the beginning of the year. The difference is considered as depreciation. What is insurance policy method of depreciation? According to this method an Insurance Policy is taken for the amount of the asset to be replaced. The amount of the policy is such that it is sufficient to replace the asset when it is worm out. A sum equal to the amount of depreciation is paid as premium every year. What are different method of providing depreciation? 1. Straight line method of fixed installment method. 2. Written down value method or diminishing balance method. 3. Annuity method. 4. Depreciation Fund method. 5. Insurance policy method. 6. Revaluation method. What is residual value? It implies the value expected to be realised on its sale on the expiry of its useful life. This is otherwise known as scrap value or turn in value. What is Annuity method of depreciation?

12.

13.

14.

15.

16.

17.

18.

19.

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The annuity method considers that the business besides loosing the original cost of the assets in terms of depreciation and also looses interest. The annual amount of depreciation is determined with the help of annuity table. 20. Define the ratio? In the words of Kennedy and Me Millian the relationship of an item to another expressed in simple mathematician form is known as a ratio.

12
1.

marks
Define Depreciation? What are the reasons for providing depreciation? Define : Carter defines depreciation as the gradual and permanent decrease in the value of an asset from any cause. 1) To ascertain correct profit / loss : It is necessary to charge depreciation against revenue is each accounting year to calculate the correct net profit or net loss. 2) To present a true and fair view of the financial position? Hence to present a true and fair financial position of the business, it is necessary that depreciation must be deducted from the book value of the assets in the balance sheet. 3) To ascertain the real cost of production : For ascertaining the real cost of production it is necessary provide depreciation. 4) To comply with legal requirements : As per section 205 (1) of the companies Act 1956 it is compulsory for companies to provide depreciation on fixed assets before it declares dividend. 5) To replace asssets : Depreciation is provided to replace the assets when it becomes useless. Explain the causes for Depreciation. Causes of Depreciation Internal External 1. Wear and Tear 1. Obsolescence 2. Disuse 2. Effusion of time 3. Maintenance 3. Time factor 4. Depletion I. Internal causes 1. Wear and tear: Wear and tear is an important cause of depreciation in case of tangible fixed asset. It is due to use of the asset. 2. Disuse : When a machine is kept continuously idle, it becomes potentially less useful. 3. Maintenance : The value of machine deteriorates rapidly because of lack of proper maintenance. 4. Depletion : It refers to the physical deterioration by the exhaustion of natural resources. E.g. : mines, quarries, oil wells etc. II. External causes :

2.

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1. Obsolescence : The old asset will become obsolete (useless) due to new inventions, improved techniques and technological advancement. 2. Efflux of time : When assets are exposed to forces of nature, like weather, wind, rain, etc., the value of such assets may decrease even if they are not put into any use. 3. Time factor : Lease, copy-right, patents are acquired for a fixed period of Time. ON the expiry of the fixed period of time, the assets cease to exist. 3. Write note on cash budget and what are the characteristics and advantages of cash budget? 1. Cash budget is one of the most important budgets prepared by a business concern as every transaction directly or indirectly deals with cash. 2. Cash budget shows the estimate of cash receipts and cash payments from all sources over a specific period. 3. This is also called a finance Budget. Characteristics : Budget has the following important characteristics. 1. It is prepared in advance and relates a future period. 2. It is expressed in terms of money and / or physical units. 3. It is a mean to achieve the planned objective. Advantages : 1. It helps in maintaining an adequate cash balance. 2. It provides the following useful information to the management. 3. To determine the future cash needs of a business concern. 4. To plan for financing those needs and 5. To have control over cash balance of the business concern. What is Good will ? What are the factors affecting good will? Good will is the value of the reputation of the firm which the business builds up due to its efficient service to its customers and quality of its products. It is value of all favaourable attributes relating to a businss enterprise. It is an intangible asset. The Good will affecting factors are : 1. Quality : If the firm enjoys good reputation for the quality of its products, there will be a ready sale and the value of goodwill therefore will be high. 2. Location : If the business is located in a prominent place, its value will be more. 3. Efficient management : If the management is capable, the firm will earn more profits and that will raise the firms value. 4. Competition : When there is no competition or competition is negligible, the value of those business will be high. 5. Advantage of patents : Possession of trade marks, patents or copyrights will increase the firms value. 6. Time : A business establishes reputation in course of time which is running for long period on profitable line. 7. Customers altitude : The type of customers which a firm has is important. If the firm has more customers, the value will be high. 8. Nature of business : A business having a stable demand is able to earn more profit and therefore has more good will. Accountancy E.M. Pg. No. - 14
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4.

5.

What are the differences between fixed capital account and fluctuating capital account ? Fixed Capital method The capital normally remains unchanged Each partner has two accounts, namely, capital account and current account. Capital account shows always a credit balance. Current account may sometimes show debit or credit balance All adjustments relating to partners are recorded in the current accounts Fluctuating capital method The capital is changing from period to period Each partner has only one account. i.e., capital account Capital account shows always a credit balance

Basis of Distinction 1. Change in capital 2. Number of Accounts

3. Balance

4. Adjustments

All adjustments relating to partners are recorded directly in the capital accounts itself.

6. Distinguish between sacrificing ratio and gaining ratio. Distinction Sacrificing Ratio 1. Meaning It is the ratio in which the old partners have agreed to sacrifice their shares in profit in favour of new partners. 2. Purpose It is calculated to determine of amount the compensation to be paid by the incoming partner to the sacrificing partners. 3. Calculation It is calculated by taking out the difference between old ratio and new ratio 4. Time It is calculated at the time of admission of a new partner.

Gaining Ratio It is the ratio in which the continuing partners acquire the outgoing partners share. It is calculated to determine the amount of compensation to the paid by each the continuing partners to the outgoing partner. It is calculated by taking out the differences between new ratio & old ratio. It is calculated at the time of retirements of a partners.

5 marks sum
38. Interest on Drawing Rs.5,000 give adjusting Entry and Transfer Entry. Adjusting Entry Particulars Debit Credit Capital A/c Dr. 5,000 To interest on drawing A/c 5,000 Transfer entry Interest on drawing A/c Dr 5,000 To profit and loss A/c 5,000 Interest on capital Rs.6,000 give adjustment and transfer entry. Adjusting Entry Particulars Debit Credit

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Interest on capital A/c Dr. To capital A/c Profit and Loss A/c Dr. To Interest on capital Write on Bad debts Rs.2,000 Bad debts A/c Dr. To sundry debtors

6,000 6,000 Transfer Entry 6,000 6,000

Adjusting Entry 4,000 2,000 Transfer Entry Debit 2,000 Credit 2,000

Particulars Profit and loss A/c Dr. To bad debts A/c Building Rs.4,00,000, Adj : - Depreciation Building at 10% Adjustment Entry Depreciation A/c Dr. 40,000 Building A/c Transfer Entry Profit, Loss A/c or 40,000 Depreciation A/c 39. Sinle Entry Systems :What shall be the profit of the concern if Opening capital Rs.1,60,000 Closing capital Rs.1,80,000 Drawing Rs. 36,000 Additional capital Rs. 10,000 Ans : Statement of profit (or) Loss. Closing capital 1,80,000 (+) Drawing 36,000 2,16,000 (-) Additional capital 10,000 2,06,000 (-) Opening capital 1,60,000 Profit 46,000 Calculate the missing : Profit made during Capital at the end Capital introduced Drawings Opening capital

40,000

40,000

40.

2,500 6,000 2,000 1,200 ? Accountancy E.M. Pg. No. - 16

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Statement of Profit (or) Loss. Capital at the end (+) Drawing (-) (+)

Capital introduced the year Profit Opening capital -

6,000 1,200 7,200 2,000 5,200 2,500 2,700

41.

Calculate the missing information : Drawing Additional Capital Opening Capital Profit Opening capital Additional capital Profit Drawing Closing Capital

Rs. 5,000 Rs. 10,000 Rs.1,00,000 Rs. 25,000 1,00,000 10,000 1,10,000 25,000 1,35,000 50,000 85,000

(+) (+) (-)

42.

From the following particulars, find out the rate of depreciation under straight line method. Cost of fixed asset Rs.50,000 Residual value Rs. 5,000 Estimated life 10 years Amount of depreciation = Total cost scrap value Estimated life = 50,000 5,000 10 = Amount of Depreciation = Rate of Depreciation = = Rate of Depreciation = 45,00 = 4,500 1 4,500 Amount of depreciation x 100 Original cost 45 x 1 = 9 5, 9%

43.

Find out rate of depreciation under straight line method. Cost of the plant = 2,30,000 Installation charges = 20,000 Accountancy E.M. Pg. No. - 17

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Expected life in year Scrap value

= 10 years = 50,000

Cost of the plant + Installation charges = 2,30,000 + 20,000 = 2,50,000 Amount of Depreciation + Total cost scrap value Estimated life = 2,50,000 50,000 10 year = 2,00,000 20,000 = 2,00,00 = 70 1 year Amount of Depreciation = 20,000 Rate of Depreciation = Amount of Depreciation x 100 Original cost = 2 x 1 = 8% 2,5 45. (A) The Trial Balance shows on 31.3.2002, sundry debtors Rs.1,25,000. Adjustment :1. Bad debts to be written off Rs.5,000. 2. Provide @ 5% provision for bad and doubtful debts and 3. Provide @2% provision for discount on debtors. Pass entries and show how these items will appear in the Final accounts. Adjusting Entries Date Particulars L.F. Debit Credit 2002 Bad debts A/c 5,000 March 31To Sundry debtors 5,000 Profit & Loss A/c 5,000 To Bad debts A/c 5,000 Profit & Loss A/c 6,000 To provision for Bad & Doubtful debts A/c 6,000 Profit and loss A/c 2,280 To provision for discount 2,280 Profit & Loss A/c Particulars Rs. Particulars Rs. To bad debts A/c 5,000 To provision for bad and doubtful debts A/c 6,000 To provision for discount on debtors 2,250 Balance Sheet Liabilities Rs. Rs. Assets Rs. Rs. Sundry debtors 1,25,000

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(-) Bad debts

5,000 1,20,000 6,000 1,14,000 2,280 1,11,720

(-) Provision for bad and doubtful debts (-) Provision for discount The trail balance show sundry debtors Rs.65,000 31.12.2005. Adjustments : (1) Bad debts by written off : Rs.5,000. (2) Provide @5% provision for bad and doubtful. (3) Provide @2% provision for discount on debts.

20 marks
53.a) Mr. John keep his books on in complete double entry. From the following detects prepare Trading and Profit and Loss A/c for the year ended 31.03.2002 and balance sheet on at that date. Particulars 01.04.2001 31.03.2002 Stock 75,000 37,500 Cash 18,750 30,000 Machinery 7,500 7,500 Sundry debtors 1,87,500 2,62,500 Sundry creditors 1,12,500 1,31,250 Additional Information : Cash received from sundry debtors 4,05,000 Cash paid sundry creditors 3,37,500 Sales return 11,250 Purchase Return 3,750 Discount received 11,250 Discount allowed 7,500 Sundry expenses 26,250 Drawing 30,000

Total Debtors
To balance b/d To credit sales 1,87,500 By cash received 4,95,000 By sales returns By discount allowed By balance c/d 6,82,500 4,01,250 11,250 7,500 2,62,500 6,82,500 1,12,500 3,71,250

Total Creditors
To cash paid To purchase returns To discount received To balance b/d 3,37,500 By balance b/d 3,750 By credit purchase 11,250 1,31,250 4,83,750

4,83,750

Statement of affairs

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Sundry creditors Opening capital

1,12,500 1,76,250

Stock Sundry Debtors Cash Furniture

2,88,750

75,000 1,87,500 18,750 7,500 2,88,750

Trading and Profit & Loss Account


To opening stock 75,000 By sales Cash 3,750 Credit Sales 4,95,000 4,98,750 (-) Sales Returns 11,250 3,67,500 Closing stock 82,500 5,25,000 7,500 By Gross Profit 26,250 By Discount received 60,000 93,750 Assets 1,31,250 Cash Sundry Debtors Furniture Closing stock 2,06,250 3,37,500

To purchase 3,71,250 (-)purchase returns 3,750 Gross Profit Tp discount paid To General Expenses To Net Profit Balance Sheet Liabilities Sundry Creditor Capital (-) Drawing (+) Net profit

4,87,500 37,500 5,25,000 82,500 11,250 93,750

1,76,250 30,000 1,46,250 60,000

30,000 2,62,500 7,500 37,500 3,37,500

From the following details, prepare trading and profit and loss A/c and balance sheet. As on 1.4.2003 As on 31.3.2004 Rs. Rs. Sundry stock 50,000 25,000 Sundry debtors 1,25,000 1,75,000 Furniture 5,000 5,000 Cash 12,500 20,000 Sundry Creditors 75,000 87,500 Other details : Discount received 7,500 Discount allowed 5,000 Sundry expense 15,000 Cash paid to sundry creditors 2,25,000 Cash received from sundry debtors 2,67,500 Drawing 20,000 Sales return 7,500 Purchase return 2,500 Charge depreciation on Furniture @ 5%. 54. The following are the balance extracted from the books of Mrs. Nandhini as on 31st March 2004. Accountancy E.M. Pg. No. - 20
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b.

Debit Balance Drawing Cash at Bank Cash in hand Wages Purchases Stock (31.03.03) Building Sundry debtors Bills receivable Rent Commission General Expense Furniture Suspense Accounts

Rs. 40,000 17,000 60,000 10,000 20,000 60,000 1,00,000 44,000 20,000 4,500 2,500 8,000 5,000 5,000 4,05,000

Credit balance Capital Sales Sundry creditors

Rs. 2,00,000 1,60,000 45,000

4,05,000

Adjustments : 1. Closing stock Rs.40,000. 2. Depreciation on furniture at the rate of 5% per annum. 3. Interest on drawing at 5% to be provided. 4. Outstanding wages Rs.1,000. 5. Prepaid rent Rs.900. Tranding and Profit and Loss Account of Mrs. Nandhini for the period ending 31.03.2002 Particulars Amount Amount Particulars To opening stock 60,000 By sales To Purchase 20,000 By closing stock To wages 10,000 (+) Outstanding wages 1,000 11,000 Gross Profit 1,09,000 2,00,000 To Rent 4,500 By Gross Profit (-) Prepaid Rent 900 3,600 By Interest on Drawing To commission 2,500 To General expenses 8,000 To furniture on 250 Depreciation Net Profit 96,650 1,11,000 Balance Sheet of Mrs. Nandhini as on 31.3.2002 Liabilities Sundry creditors Outstanding wages Capital (+) Net profit

Amount

Amount 1,60,000 40,000

2,00,000 1,09,000 2,000

1,11,000

Amount

2,00,000 96,650

Amount Assets 45,000 Cash in hand 1,000 Cash at Bank Sundry debtors Bills receivable Accountancy E.M. Pg. No. - 21

Amount

Amount 17,000 65,000 44,000 29,000

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(-) Drawing (-) Interest Drawing

2,96,650 40,000 2,56,650 2,000

Prepaid Rent Furniture (-) Depreciation Building 2,54,650 Closing stock 3,00,650

900 5,000 250 4,750 1,00,000 40,000 3,00,650

Mr. Anbu book shows the following balance. Prepare Trading and Profit ended March 2009 and balance sheet on that Debit Balance Rs. Credit Balance Cash Balance 16,000 Capital Bank balance 40,000 Sales Drawing 5,000 Sundry Creditors Wages 4,000 Purchase 25,000 Opening stock 37,000 Building 1,50,000 Bills receivable 13,000 Sundry debtors 87,000 Commission 4,000 General expense 11,000 Insurance 8,000 4,00,000 Adjustment : 1) Closing stock Rs.25,000 2) Outstanding wages Rs.1,000 3) Prepaid Insurance Rs.2,000 4) Depreciation building 10% per annum 5) Interest on capital 6% 56. Prepare a cash budget for the month March, April and May. Month January February March April May 1) 2) 3) 4) 5) 6) Credit Purchase Credit sale

and loss Account for the year Rs. 2,00,000 1,62,000 38,000

4,00,000

75,000 1,50,000 1,00,000 1,35,000 85,000 1,75,000 1,25,000 1,20,000 90,000 1,40,000 Expected cash balance 1.3.2005 Rs.80,000 Suppliers allowed a credit period of two month. A credit period of one month is allowed to customer. Expense are paid in the same month. Sale of fixed assets Rs.25,000 in April. Purchase of fixed assets in May Rs.25,000.

Administration selling expense 1,20,000 1,35,000 65,000 70,000 80,000

Accountancy E.M. Pg. No. - 22


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Particulars Opening cash balance (+) Cash receivable from customer Sales fixed assets Total Cash available during the month (-) Payment to suppliers Administration and sales expense Purchase of Fixed assets Total Cash payment during the month 57.

March 80,000 1,35,000 2,15,000 75,000 65,000 1,40,000 75,000

April 75,000 1,75,000 25,000 2,75,000 1,00,000 70,000 1,70,000 1,05,000

May 1,05,000 1,20,000 2,25,000 85,000 80,000 25,000 1,90,000 35,000

Prepare cash budget of Rama Ltd. For the month of January to March 2004 from the following information. Month Credit purchase Credit Sales Expenses 2003 November 2,00,000 2,50,000 50,000 December 3,50,000 3,00,000 60,000 2004 January 3,00,000 4,50,000 70,000 February 4,00,000 2,00,000 80,000 March 5,00,000 3,50,000 70,000 Additional information : (i) Expected cash balance on 1.1.2004 Rs.75,000 (ii) Supplier allowed credit of two months and a credit of two months is allowed to the customers. (iii) Lag is payment of expense one month. (iv) Sale of fixed assets in the month of February 95,000. Prepare a cash budget for October, November and December 2004 from the following information. Month Sales Purchase Expense September 2004 1,00,000 8,00,000 1,10,000 October 2004 12,00,000 12,00,000 1,30,000 November 2004 14,00,000 8,00,000 1,50,000 December 2004 16,00,000 10,00,000 1,70,000 1) All sales are for cash. 2) The period of credit allowed by the suppliers is one months. 3) Lag in payment of expense is one month. 4) Opening cash balance on 01.10.2004 Rs.90,000. 5) In December an asset for Rs.4,00,000 is to be purchased. ----------------

58.

Accountancy E.M. Pg. No. - 23


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History

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History 3 mark question & answer


I. Rohilkand 1. Rohilkand was a small kingdom situated in between oudh and the marathan 2. The people of Rohilkand was called Roihillas. 3. Its ruler was Hafiz rahmat Khan Pitts India Act -1784 1. It abolishes the demerits of regulating act. 2. It was passed during the time of pitt the younger in 1784 A.D 3. A board of control consisting of six members was created Treaty of Srirangapattinam 1. It was signed at the end of Third Mysore war. 2. Tipu sultan to give up half of his dominious to British. 3. After this war, although the strength of mysore had been reduced. Treaty of Bassein 1. It was signed between Lor Wellesley Maratha Peshwa Baji rao II. 2. This treaty was belongs to subsidiary allaince system. 3. Other Marathas considered this tready as slave document. Abolition of sati 1. The practice of Sati, the age old custom of burning of widows alive on the funeral pyre of their husbands 2. It was prevalent in North India and Bengal. 3. It was abolished in 1829 by Lord william Bentinck Female infanticide 1. Practice of killing female infants was very much prevalent in places like Rajputana, Punjab, Malwa and Cutch. 2. Bentinck took effective steps to prevent the ritual of child sacrifice ot sauger Island in Bengal. 3. Bentinck prohibited female infanticide, declared them as punishable crime. Lord Mecaulay 1. During the time of William Bentinck he introduced Western Education in India. 2. Maccaulay insisted medium of instruction should be in English. 3. In 1835 English became an administrative language and teaching language. Doctrine of lapse 1. For extending of British empire lord Dalhausie followed the policy of Doctrine of Lapse. 2. It cancelled the right of adoption by an Indian State. 3. It was also one among the reason for 1857 First War of Indian Independance Half an anna Postal system 1.Dalhousie laid a foundation for Modern Postal System in India. 2. He introduced a uniform rate of half an anna per post card was charged throughout India. 3. It was introduced in the year 1854 . A.D.

2.

3.

4.

5.

6.

7.

8.

9.

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10. Woods Despatch 1. It was ntroduced in 1834 during the time of Lord Dalhausie. 2. It was considered asIntellectual Charter of Inida. 3. It provided an outline for the comprehensive scheme of education at primary, secondary and collegiate levels. 11. Ryotwari System 1. It was introduced by sir Thomas Mudro in Madras Presidency 2. The peasant was recognised as the proprietor of land. 3. There was no intermediary like Zamindars. 4. Land tax was directly paid by the peasants.

12. Mahalwari System 1. In 1833 Mahalwari System was introduced in Punjab, UttarPradesh. 2. It was introduced by William Bentinck 3. Under this system the basic unit of revenue settlement was Village or Mahal. 13. Purdah System 1. Voices were raised the practice of purdah during the 19th and 20th century. 2. It was not prevailed in South India. 3. The condition of women among the peasantry was relatively better in this respect. 14. Bennerman 1. Chief of the British expedition against Kattabomman. 2. In 1799 september the major served an Ultimatum directing Kattabomman to surrendar. 3. Bennerman announced death penalty to Kattabomman and hanged to death at Kayattar. 15. Puli Thevar 1. Palaykkarar of Nerkkatumseval Palayam. 2. Puli Thevan exibited the Maravas Valour and Patiatism. 3. He was defeated by col . cambell in 1767A.D. 16. Clonel Gillerpie 1.He was the commander of Ranipet regiment. 2.He curshed the Vellore mutiny. 3. In 1806 at Vellore Fort he killed so much of Indian soliders. 17. Sir John Cradock 1. The commander - in - chief of the vellore fort in 1806. 2. He introduced new form turban for Vellore Fort soldiers. 3. Wearing ear rings and caste marks wer also prohibited to soliders. 18. Nana Sahib 1. Foster son of Peshwa Baj rao II 2. He was the head of Kanpur Mutiny. 3. He was very much supported by Tantia Tope the other was Aximullah. 19. Vernacular Press Act -1878 1. It was passed during the time Lytton.
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2. This Act crushed the freedom of the Indian press. 3. An undertaking from the editor of a vernacular newspaper that nothing would be published against the English Government. 20. Ilbert Bill 1.It was brought during the time of Lord Ripon 2. According to this bill Indian judges can tried Europe criminals. 3. It was very much opposed by Europeons and Lord Ripon resigned. 21. Swamy Vivekananda 1. The original name of Swami Vivekananda was Narendra Dutta. 2. He was the famous discliple of Rama Krishna Paramahamsa. 3. Swami Vivekananda participated at the parliament of religion held in chicago in 1893 amd raised the prestige of India very high. 22. Aligarh Movement 1.It was founded by sir Syed Ahamed Khan . 2. It was started for social and educational advancement of the Muslims in India. 3. In 1875 he founded a modern school at Aligarh. 23. Partition of Bengal 1. In 1905 Lord Curzon partitional Bengal into two. 2.This partition divided the Hindus ans Muslims in Bengal. 3. This had also inteurified the national movements. 24. Surat Split 1. In 1907 at Surat congress, got divided into two 2. One group was named as Moderates and another group was named as extremists. 3. Extremists came out of the congress led by Tilak and others. 25. Muslim League 1906 1. It was founded by Nawab Saleemullah. 2. Their first achievement won the seperate electorates for the Muslims in the Minto- Marley reforms. 2. It was welfare for Muslims. 26. Queen Victorias Proclaimation 1. It was the result of 1857 Great Indian Revolt in 1858. 2.By this procolaimation East India company rule in India came to an end. 3. All Indians are equal to Europeans. 27. Dandi March 1. In 1930 Gandhiji began his famous March to Dandi 2. By treating the salt laws Gandhiji with his famous chosen 79 followers March to dandi. 3. In 1930 April .6 Dandi sea cost break the salt law. 28. Panch Sheel 1. It was designed by Pandit Jawaharlal Nehru. 2. He was the architect of the Non - Aligned movement during the codl war era. 3. Nehru outlived the five principles of co - existence (or) Panch Sheel.
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29. Renaissance 1. The term Renaissance literally means rebirth (or) revival 2. The most important centribution of the renaissance was the revival and learning of ancient Greek and Latin literature. 3. It was started in Italy. 30. Ignatious Loyola 1. He founded society of Jesus of counter reformation society. 2. The aim of this society was to reform and restore the glory of the Catholic Church. 3. They established schools and colleges in several parts of the world. 31. Townshand Laws 1. Charles Townshend the finance minister of England imposed fresh taxes on glass, paper, tea, paints etc. in 1767. 2. It was known as Townshend laws 3. The American protested it and boycotted the British goods. 32. Boston Tea Party 1. In 1773, a new Tea Act was passed imposing a tax on import of tea. 2. It was a symbol to show that the British Parliament had the right to tax the colonies. 3. But Americans showed their protest. A group of Americans dressed as Red Indinas. Climbed on the ships and threw away the tea boundles into the sea at the Boston harbour. 33. Rousseau 1. Rousseau was the author of the famous book, Social contract. 2. He said that the real sovereignty rests with the people. 3. His famous statement, Man is born free and is everywhere in chains. 34. John Mc Adam 1. He belonged to England. 2. He built a type of Hard surfaced road in England. 3. France copied the English methods. 35. Long March 1. Mao retired to northern China. It is known as the Long March. 2. There the communists established their control. 3. A Civil war broke out between the communists and the kuomuistang. Finally, Mao established the Peoples Republic of China in October 1949. 36. The Coldwar 1. The end of the second World War saw the rise of the U.S.A. and USSR as super powers. 2. The strained relationship between these two countries till the collapse of the USSR is known as the Cold war. 3. The term Cold war was used for the first time by Bernard Baruch. 37. John Calvin 1. The French protest reformer John Calvin was born in Franch. 2. He subscribed to the doctrine of the absolute fore - knowledge and determining power of god. 3. He became the head of the Church in Geneva.
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38. Bloody Sunday 1. The striking workers went on a procession to Tsars palace to present a petition to redress their grievances. 2. They were led by Father Gapon. 3. This event is known as Bloody sunday in 1905. 39. NATO - 1949 1. The U.S.A had created a militany alliance to prevent further spread communism into Western Europe 2. A beginning in this direction was made by the signing of the Brussels Tready in March 1948. 3. Britain, France, Holland, Belgium and Luxeuberg signed this tready in 1949. 40. Global Terrorism 1. The term terriorism means politically motivated violence carried out aganist mostly unarmed civilian Population by group of terrorists. 2. The term international terrorism means terrorism involving citizens of more than one country. 3. The most violent terrorist attack was made on the twin towers of the world trade centre, Newyork on september 11, 2001. 41. World trade organization (WTO) 1.The origin of Wrorld Trade Organization could be traced from the Bretton Woods conference of 1944. 2. The Head quarters is in Geneva. 3. There are 149 members in the organization. 6 Marks 1. Discuss the main provisions of the Regulating Act Page No. 5, 6 2. 3. 4. 5. 6. 7. 8. 9. Main features of subsidiary Alliance. Page No. 25, 26 Write the Judicial reforms of Lord Cornwallis. Page No. 19 What are the causes of the Defeat of Maratha? Page No. 41. Point out the sailert features of the permanent Land Revenue settlement. Page No. 67, 68 Write a note on the Role of Maruthu brothers in South Indian Rebellion. Page No. 91, 92 Analyse the Results of the Great Revolt of 1857. Page No. 108, 109 Write a note on Famine policy followed by Lord Lytton Page No. 114, 115 Discuss the Importance of Local Self Govt.? Page No. 117

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10. Bring out the Importance of the Swadeshi movement. Page No. 152 11. Discuss the principles of Saint Ramalinga Page No. 133

12. Discuss the Role of V.O.C. in the Indian National movement. Page No. 178 13. What are the Education Reforms of Justice Party. Page No. 188, 189 14. Discuss the Salient features of the Indian Constitution. Page No. 207 15. Results of the First World War. Page No. 291 16. Examine the causes for the Industrial Revolution Page No. 275 17. Results of the Second World War. Page No. 332 18. State the Aims of the UNO. Page No. 344 19. Describe the important organs of the League of Nations. Page No. 304, 305, 306 20. Write a note on Mao Tse Tung Page No. 337, 338 21. Result of the Renaissance. Page No. 22. Causes for the Decline of Handi Craft Industries. Page No. 72 23. What are the Main demands of Moderates. Page No. 143 24. Analise the causes for the Geographical Discoveries. Page No. 234 10 Marks 1. 2. 3. 4. 5. Give an account of the reforms of Warren Hastings. Page No. 2 from 3rd para, Page No. 3 Full, Page No. 4 - 2nd para Bentinck inagurated an ora of social reforms-comment Page No. 51 full, Page No. 52 first para only Estimate the reforms of Lord Dalhausie Page No. 59 3rd para, Page No. 60 Full, Page No. 61 first 3 paras Examine the causes for the Revolt of 1857 Page No. 103 3 para, Page No. 104 4 paras Examine the causes for the rise of Nationalism in India. Page No. 139, Page No. 140, Page No. 141 First 2 paras
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6.

Estimate the role of Mahatma Gandhi in the Indian Freedom struggle. Page No. 159 - 4 th para, Page No. 160 st I Para, Page No. 161 2 nd para point full Page No. 162 3rd para only, Page No. 165 2nd, 3rd para, Page No. 168 2nd Para, Page No. 169 3rd, 4th para, Page No. 171 3rd para, Page No. 172 First 2 paras Jawaharlal Nehur is the architect of Modern Inida - Discuss Page No. 209 - 3rd Para, Page No. 211 - 4th para, Page No. 212 - 1st, 2nd, 3rd, Paras Page No. 214 - 2nd Para, Page No. 216 - 3rd Para Examine the role of Tamil Nadu in the Indian Freedom Stuggle Page No. 177 - 2 nd Para, Page No. 178 - 2 nd , 3 rd , 4 th para, rd th Page No. 180 - 3 , 4 Para, Page No. 181 full Estimate the role of UNO in maintaining the world peace. page No. 347 - last para, Page No. 348 - Full, Page No. 349 - First 3 Paras Page No. 179 full

7.

8.

9.

10. Enumerate the various causes of the First World War. Page No. 287 - full, Page No. 288 1st to 4th Paras, Page No. 289 4th para Page No. 290 - first para only ~~~~~~~~~~~~~~~~~~~~

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