Common University Entrance Test (UG)
Question : Quaternary activities are characterized by:
Option 1: Manual labor
Option 2: Knowledge-based services
Option 3: Primary production
Option 4: Large-scale manufacturing
Correct Answer: Knowledge-based services
Solution : Quaternary activities are characterized by knowledge-based services such as information technology, research and development, and financial services.
Question : Decrease in Cash Credit. would result in inflow/outflow/no flow of Cash and Cash Equivalents:
Option 1: Inflow of cash
Option 2: Outflow of cash
Option 3: Neither inflow Nor outflow
Option 4: Cash and cash equivalent
Correct Answer: Outflow of cash
Solution : Answer = Outflow of cash A decrease in cash credit signifies a reduction in the available borrowing limit. If a business uses this credit line to withdraw funds, it leads to a decrease in their cash and cash equivalents. Cash credit is treated as a short-term borrowing facility offered by banks. Hence, the correct option is 2.
Question : Case Study:
Luxe Watches is known for its high-quality watches that have a strong reputation among customers. This reputation contributes to customer trust and loyalty. What does this case exemplify?
Option 1: Packaging
Option 2: Branding
Option 3: Promotion
Option 4: Pricing
Correct Answer: Branding
Solution : The correct answer is (b) Branding.
The strong reputation of Luxe Watches among customers, contributing to trust and loyalty, is a result of effective branding. Branding is the process of creating a distinct and positive identity for a product or service in the minds of consumers. Luxe Watches has established a reputation for high-quality watches, which has become synonymous with their brand. This positive brand image contributes to customer trust and loyalty, highlighting the importance of branding in this scenario.
Question : What is the focus of target area planning?
Option 1: Developing urban centers
Option 2: Addressing regional imbalances
Option 3: Promoting tourism
Option 4: Encouraging agricultural exports
Correct Answer: Addressing regional imbalances
Solution : The focus of target area planning is on addressing regional imbalances by concentrating development efforts on specific areas to promote balanced growth and reduce disparities.
Question : Which of the following is the element of communication process?
Option 1: Encoding
Option 2: Media
Option 3: Both A and B
Option 4: Neither A nor B
Correct Answer: Both A and B
Solution : Encoding is the process of converting message into communication symbol. Media is the path, the channel or medium through which encoded message is transmitted to the receiver. Hence Option C is correct.
Question : Statement 1: Capital market instruments have maturities ranging from a few days to one year.
Statement 2: Capital market instruments are used for long-term financing.
Option 1: Statement 1 is true, and statement 2 is true.
Option 2: Statement 1 is true, but statement 2 is false.
Option 3: Statement 1 is false, and statement 2 is true.
Option 4: Statement 1 is false, and statement 2 is false.
Correct Answer: Statement 1 is true, but statement 2 is false.
Solution : The correct answer is (b) Statement 1 is true, but statement 2 is false.
Statement 1 is true. Capital market instruments can indeed have a range of maturities, including short-term maturities (a few days) up to longer-term maturities (up to one year). Examples of short-term capital market instruments include Treasury bills and commercial paper.
Statement 2 is false. Capital market instruments are typically used for medium to long-term financing rather than exclusively long-term. Long-term financing typically involves maturities exceeding one year, and while capital market instruments can certainly have maturities beyond one year, they can also have shorter maturities.
Question : The concept of sustainable development emphasizes:
Option 1: Economic growth at any cost
Option 2: Environmental protection at any cost
Option 3: Balancing economic growth and environmental protection
Option 4: Reducing economic growth for the sake of environmental protection
Correct Answer: Balancing economic growth and environmental protection
Solution : The correct answer is (c) balancing economic growth and environmental protection.
Sustainable development is a holistic approach that seeks to meet the needs of the present generation without compromising the ability of future generations to meet their own needs. It recognizes that economic development, social progress, and environmental protection are interdependent and should be pursued in a balanced and integrated manner.
Sustainable development promotes the efficient use of resources, the adoption of clean technologies, and the preservation of ecosystems to ensure long-term environmental sustainability. It recognizes the importance of addressing climate change, biodiversity loss, pollution, and other environmental challenges as integral parts of development strategies.
Question : What does the term "currency appreciation" refer to?
Option 1: Increase in the value of domestic currency
Option 2: Increase in the value of foreign currency
Option 3: Decrease in the value of domestic currency
Option 4: Decrease in the value of foreign currency
Correct Answer: Increase in the value of domestic currency
Solution : The correct answer is a) Increase in the value of domestic currency
The term "currency appreciation" refers to an increase in the value of a domestic currency relative to other currencies. It means that one unit of the domestic currency can purchase a greater amount of foreign currency or goods and services denominated in foreign currencies.
Currency appreciation typically occurs when there is an increase in demand for the domestic currency in the foreign exchange market. Factors such as strong economic performance, high interest rates, positive investor sentiment, or increased demand for a country's exports can contribute to currency appreciation.
Currency appreciation has various implications. It can make imports cheaper, potentially leading to lower inflation and increased purchasing power for consumers. However, it may also make exports more expensive, affecting the competitiveness of a country's goods and services in international markets.
Question :
At the time of the reissue of all forfeited shares
Option 1:
General Reserve is debited with the credit balance left in the Forfeited Shares Account
Option 2: General Reserve is credited with the credit balance left in the Forfeited Shares Account
Option 3:
Capital Reserve is debited with the credit balance left in the Forfeited Shares Account
Option 4:
Capital Reserve is credited with the credit balance left in the Forfeited Shares Account
Correct Answer:
Solution :
Answer = Capital Reserve is credited with the credit balance left in the Forfeited Shares Account
Capital Reserve is credited with the credit balance left in the Forfeited Shares Account. Entry will be:
Share Forfeiture A/c Dr. To Capital Reserve A/c Hence, the correct answer is 4.
Question : Purchase Rs.80,000; Opening Inventory Rs. 10,000 and Closing Inventory Rs.30,000. which of the following transactions will decrease ----
Option 1: Goods purchased for Rs.20,000
Option 2: Purchase returns Rs.5,000
Option 3: Goods costing Rs. 10,000 withdrawn for personal use
Option 4: Goods costing Rs.5,000 distributed as free sample
Correct Answer: Goods purchased for Rs.20,000
Solution : Answer = Goods purchased for Rs.20,000
I. T. Ratio $=\frac{\text {Cost of Goods sold }}{\text { Average Inventory }}$
= 60,000/20,000 = 3 times
Cost of Goods
Sold = 10,000 + 80,000 - 30,000
= 90,000 - 30,000 = 60000
Average Inventory = 10,000 + 30,000 / 2
= 40,000 / 2
= 20,000
If purchased goods then the Cost of Revenue from the operation will Remain unchanged Because of the increase in Purchases and increase in closing Inventory. Hence, the correct option is 1.
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