Commercial Law and Preliminaries of Auditing – 2016
PART – A
Commercial Law
Group – A
1. Answer the following questions: [1×12=12]
Choose the correct answer:
(i) When a proposal is accepted, it is known as
(a) consideration
(b) agreement
(c) promise
(d) contract
(ii) Which one of the following is not an element of a valid contract?
(a) offer & acceptance
(b) legal consideration
(c) free consent
(d) none of these
(iii) A contract of a minor is
(a) void ab initio
(b) voidable
(c) legal
(d) none of these
(iv) If an offer is refused by the acceptor, the said offer
(a) remains valid
(b) becomes void
(c) is revised
(d) does not become void
(v) An agreement created without consideration is a _ agreement.
(a) void
(b) voidable
(c) illegal
(d) valid
(vi) Undue influence can be exerted only by those who are
(a) related to each other
(b) not related to each other
(c) friendly to each other
(d) all of these
(vii) Which of the following persons will be considered as disqualified to enter into a contract as per the Indian Contract Act?
(a) insolvent person
(b) convicted person
(c) foreign ambassador
(d) all of them
(viii) A contract of sale embodies
(a) only sale
(b) only agreement to sell
(c) both of these
(d) none of these
(ix) According to the ‘Doctrine of Caveat Emptor’, the buyer shall be informed about the quality of the goods by whom?
(a) The seller
(b) The Government
(c) Buyer himself/herself
(d) Both seller & Government
(x) The goods whose property passes to the seller after making of the contract of sale are
(a) existing goods
(b) contingent goods
(c) future goods
(d) none of these
(xi) Which of the following is considered as ‘goods’ as per the Sale of Goods Act, 1930?
(a) Building
(b) Land
(c) Furniture
(d) Actionable claim
(xii) ‘Agreement to sell’ is
(a) Executed contract
(b) Executory contract
(c) Both of these
(d) None of these
Group – B
2. Answer the following questions (Alternatives are to be noted): [1×6=6]
(i) Name a source of Indian Commercial Law.
(ii) What is meant by ‘promise’?
(iii) State any two elements of agreement.
Or, Give an example of quasi contract.
(iv) What is a unilateral mistake?
Or, What is meant by coercion?
(v) What is specific good?
Or, Define ‘goods’ as per Sale of Goods Act, 1930.
(vi) What do you mean b y ‘Agreement to sell’?
Group – C
3. Answer the following questions (Alternatives are to be noted): [4×4=16]
(i) What is meant by ‘Rule of Law’?
(ii) Distinguish between Coercion and Undue Influence.
Or, “No consideration no contract.” – State the exceptions to this Contract of Sale.
(iii) Differentiate between Conditions and Warranties in a Contract of Sale.
Or, Discuss, in brief, under which circumstances a condition can be treated as a warranty.
(iv) When does property in the goods pass from the seller to the buyer in case goods are sold on approval or sent on Sale or return basis?
Group – D
4. Answer the following questions (Alternatives are to be noted): [6×1=6]
Discuss, in brief, the essential elements of a valid contract.
Or, What is consideration? Discuss the rules regarding consideration.
PART – B
Preliminaries of Auditing
Group – A
(i) The full form of CAGI is
(a) Comptroller and Auditor General of India
(b) Comptroller and Accountant General of India
(c) Comptroller and Auditor General of India
(d) Controller and Accountant General of India
(ii) Internal auditor is a/an
(a) Independent person
(b) Employee of the concern
(c) Director of the concern
(d) Manager
(iii) Which of the following is not an advantage of auditing?
(a) Detection and prevention of errors and frauds in accounting
(b) Disclosure of true and fair view of financial state of the firm
(c) Testing the efficiency and effectiveness of management
(d) Testing the efficiency of internal control system
(iv) Which of the following statements is not true?
(a) Auditing is a luxury
(b) A third party does not get any benefit from auditing
(c) A C.A cannot be a cost auditor
(d) All of these
(v) If a transaction is not recorded in the books of accounts it is called
(a) Error of principle
(b) Error of posting
(c) Error of commission
(d) None of these
(vi) Which of the following is not an advantage of periodical audit?
(a) No monotony
(b) Detailed checking of accounts
(c) Economy in time
(d) Good relation with employees
(vii) When auditor checks only the payment side of Cash Book, it is called _ audit.
(a) Periodical
(b) Partial
(c) Complete
(d) Interim
(viii) Which of the following types of audit is not based on time?
(a) interim Audit
(b) Periodical Audit
(c) Partial Audit
(d) Continuous Audit
(ix) Verification of the truth and fairness of each and every transaction of an organisation is
(a) Internal Audit
(b) Complete Audit
(c) Non-Statutory Audit
(d) Partial Audit
(x) The organisations where continuous audit is appropriate are
(a) Government Organisations
(b) Public Companies
(c) Large Business Enterprise
(d) All of these
(xi) The main element of internal control system is
(a) Internal Audit
(b) Internal Check System
(c) Both (a) and (b)
(d) None of these
(xii) Internal Auditor is appointed by
(a) Shareholders
(b) Board of Directors
(c) Central Government
(d) Income tax Department
Group – B
6. Answer the following questions (Alternatives are to be noted): [1×6=6]
(i) What is audit?
(ii) What is the primary objective of auditing?
Or, State the professional qualification of the Statutory Auditor of a company.
(iii) What do you mean by Non-Statutory Audit?
Or, State an advantage of Internal Audit.
(iv) What is Partial Audit?
(v) What do you mean by Internal Control System?
(vi) State one advantage of Internal Control System.
Or, State one objective of Internal Control System.
Group – C
7. Answer the following questions (Alternatives are to be noted): [4×4=16]
(i) Discuss the limitations of auditing.
(ii) Distinguish between misappropriation and manipulation.
Or, Discuss the duties of an Auditor in relation to frauds.
(iii) Distinguish between ‘Continuous Audit’ and ‘Periodical Audit’.
Or, Distinguish between ‘Statutory Audit’ and ‘Non-Statutory Audit’.
(iv) Mention two advantages and two disadvantages of Partial Audit.
Group – D
8. Answer the following questions (Alternatives are to be noted): [6×1=6]
What do you mean by Internal Check System? Discuss its advantages.
Or, Distinguish between Internal Control System and Internal check System.
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