Post Graduate Teacher PGT Commerce Exam 2020 HPPSC Shimla Solved Paper with Explanation

➤ In India, the GST is a dual model of:

UK
Canada
USA
Japan

In India, the Goods and Services Tax (GST) follows a dual model, which is based on the Canadian model. It involves both central and state governments in the collection of tax.

➤ GST is a consumption of goods and service tax based on:

Development
Dividend
Destination
Duration

GST is a consumption-based tax that follows the destination principle, meaning tax is levied at the point of consumption rather than production.

➤ Which code is used to classify goods and services under GST?

HMN Code
SAC/HSN Code
Both a and b
None of these

Goods and services under GST are classified using the SAC (Services Accounting Code) for services and HSN (Harmonized System of Nomenclature) Code for goods.

➤ From the following options which one will you select for an individual who is said to be resident in India?

He has a house in India
He is in India in the previous year for a period of 182 days or more in a fiscal year.
He is in India for a period of 30 days or more during the previous year and for 365 or more days during 4 previous years immediately preceding the relevant previous year
His parents are Indian citizens

To be considered a resident of India, an individual must be present in India for at least 182 days during the previous financial year or 60 days during the current year and 365 days during the 4 years preceding the current year.

➤ Which of the following is an agricultural income?

Dividend paid by a company out of its agricultural income.
Share of Profit of a Partner from a firm engaged in agricultural operation
Income from the supply of water by an assessee from a tank in its agricultural land.
Interest received by a money lender in the form of agricultural produce.

Agricultural income includes profits from farming operations, such as the share of profit from a firm engaged in agricultural activities.

➤ Taxable value of perquisite being sweat equity shares allotted by the employer is:

The fair market value of such shares as on the date when such option is exercised by the employee as reduced by the amount paid.
Rent or revenue derived from land which is situated in India and is used for agricultural purposes.
Fair market value subject to standard deduction of 50000
Not taxable in the hands of the employee.

The taxable value of sweat equity shares is determined based on their fair market value on the date of exercise of the option, minus the amount paid by the employee for the shares.

➤ Loss from derivative trading is:

Short-term Capital Loss
Speculative business loss
Non-speculative business loss
Loss under the head ‘Income from Other Sources’

Loss from derivative trading is categorized as a non-speculative business loss because it is considered part of regular business operations.

➤ Unabsorbed depreciation can be carried forward for:

Any number of years
8 years
4 years
7 years

Unabsorbed depreciation can be carried forward indefinitely until it is fully utilized, providing flexibility in offsetting it against future profits.

➤ At what rate is tax deducted from payment made to a resident on winning from a lottery?

30%
30% + Surcharge + HEC
30% + HEC
31%

The tax rate on lottery winnings is 30%, which is deducted at source. Additional charges like surcharge and health and education cess may apply based on the total income.

➤ Which ITR form number is to be used for filing the return of income by an individual having business income?

Form No. 1
Form No. 2
Form No. 5
Form No. 3

Individuals with business income should use Form No. 3 for filing their income tax return, as it accommodates details required for business income reporting.

➤ A Zero coupon bond is a long-term capital asset if it is held for more than ………. months before transfer.

6 months
12 months
8 months
None of these

Zero coupon bonds qualify as long-term capital assets if held for more than 12 months before transfer, allowing for favorable tax treatment on long-term capital gains.

➤ The maximum amount deductible u/s 80 TTA in respect of interest on savings bank account is:

10,000
20,000
50,000
100,000

Under section 80 TTA, an individual can claim a maximum deduction of ₹10,000 for interest earned on savings bank accounts.

➤ Which of the following dates marks the end of the period covered by AS-4?

On 2 May 2013 the draft financial statement ready for issue to the accounts committee
On 9 May 2013 accounts committee approves the financial statement
On 15^th May 2013 board of directors approves the financial statement.
On 30 May 2013, shareholders approve the financial statements

AS-4 deals with events occurring after the balance sheet date. The end of the period covered is marked by the approval of financial statements by the board of directors.

➤ Start-up cost, training cost, and cost of reallocating should be accounted for as:

Deferred revenue expenditure
Expenses
Intangible assets
Liability

Start-up costs, training costs, and costs related to reallocating resources are typically considered expenses and are accounted for in the profit and loss statement.

➤ Employee stock options can be offered by a public company by passing:

A special resolution in a general meeting
An ordinary resolution in a general meeting
A resolution in the board meeting
No resolution required

Public companies must pass a special resolution in a general meeting to offer employee stock options, as it requires approval from shareholders.

➤ A company granted 4000 options to employees and director on 1 April 2013 at Rs. 150 when the market price was Rs. 300. Vesting period is 3 years. What is the value of Option

50,000
60,000
6,00,000
55,000

The value of an option is calculated as (Market Price – Exercise Price) * Number of Options. Here, it is (300 – 150) * 4000 = 6,00,000.

➤ The buy-back of equity shares in any financial year should not exceed

20% of the total paid-up equity share capital in that financial year
25% of the total paid-up equity share capital in that financial year
25% of the total called up equity share capital in that financial year
20% of the total paid up equity share capital plus free reserve of the company

The maximum limit for buy-back of equity shares in a financial year is 25% of the total paid-up equity share capital in that financial year.

➤ The acquisition of an enterprise by issue of shares will

Be shown in the cash flow statement under investing activities
Not be shown in the cash flow statement
Are treated as cash flow from financial activity
All of the above

Acquisition of an enterprise by issuing shares is not shown in the cash flow statement, as it does not involve cash flow directly.

➤ Royalty revenue should be recognized

On an accrual basis in accordance with the terms of the relevant agreement
Cash basis
On actual basis
None of the above

Royalty revenue should be recognized on an accrual basis, which matches the revenue to the period in which it is earned, as per the terms of the relevant agreement.

➤ In which of the following cases, income of previous year is assessable in the previous year itself

Assessment of persons leaving India
A person in employment in India
A person who is into illegal business
A person who is running a charitable institution

Income of a person leaving India is assessable in the previous year itself to ensure proper taxation before their departure.

➤ For availing exemption under section 54, which amount is eligible for availing exemption?

The taxpayer (i.e., Seller) needs to be an individual or HUF.
Asset needs to be classified as a long-term capital asset.
The seller should purchase a residential house either 1 year before the date of sale/transfer or 2 years after the date of sale/transfer
All of the above

To avail exemption under section 54, the seller must be an individual or HUF, the asset must be a long-term capital asset, and the residential house must be purchased within the specified time frame.

➤ Which of the following is not an income taxable as income from other sources?

Family pension
Casual income
Director’s sitting fee for attending board meetings
Rent received for house property including use of plant and machinery, where rent is separable between rent for use of plant and machinery

Rent received for house property, including the use of plant and machinery, is typically not considered as income from other sources if the rent is separable.

➤ Who is the Chairman of GST Council 2019?

Prime Minister
Corporate Affair minister
Union Finance Minister
President of India

The Chairman of the GST Council in 2019 was the Union Finance Minister.

➤ Service tax was introduced in India in the year.

1993
1995
2004
1994

Service tax was introduced in India in 1994.

➤ After which error will a trial balance still balance

Wages paid Rs. 20,000 was entered correctly in the bank account but debited to the wage account Rs. 25,000
Rent received Rs. 50,000 was debited to the rent payable account
The sales day book was under cast by Rs. 20,000
Goods returned to supplier Rs. 150 were entered in purchase returns day book as Rs. 105

A trial balance will still balance if there is an error where goods returned are recorded incorrectly but the same amount is adjusted in both the debit and credit sides.

➤ Which lake is situated near the Chanshal Peak (Rohru)?

Tanu Jubbal
Chandranahan
Katasan
Karali

Chandranahan Lake is situated near Chanshal Peak (Rohru).

➤ Which of the following is a tributary of the Chenab river?

Miyar
Baner
Harla
Awa

The Miyar river is a tributary of the Chenab river.

➤ Which pass joins Lahaul and Bharmour?

Borsa
Kugti
Makori
Jalori

The Kugti Pass connects Lahaul and Bharmour.

➤ In which district of H.P. is Gemur monastery?

Chamba
Kullu
Kinnaur
Lahaul-Spiti

Gemur Monastery is located in the Lahaul-Spiti district of Himachal Pradesh.

➤ Tirthan sanctuary is near ………?

Banjar
Dalhousie
Paonta Sahib
Solan

Tirthan Sanctuary is located near Banjar in Himachal Pradesh.

➤ At which place in Mandi district of H.P. there is a Sheep Breeding Farm?

Bhangrotu
Chauntra
Paddhar
Nagwain

The Sheep Breeding Farm in Mandi district is located at Nagwain, which is known for its efforts in sheep breeding and improving wool quality.

➤ For which game/sport did Pooja Thakur of Bilaspur get Parshuram Award?

Athletics
Hockey
Kabaddi
Shooting

Pooja Thakur received the Parshuram Award for her achievements in Kabaddi, highlighting her significant contributions to the sport.

➤ Near which place in Kangra District of H.P. is Chinmaya Sandeepani Himalaya Ashram?

Yol Camp
Baijnath
Nurpur
Shahpur

The Chinmaya Sandeepani Himalaya Ashram is situated near Yol Camp, which is known for its serene environment suitable for spiritual activities.

➤ Which Raja of Chamba received Knighthood in 1906?

Sham Singh
Gopal Singh
Umed Singh
Bhuri Singh

Raja Bhuri Singh of Chamba was honored with Knighthood in 1906 for his contributions and services to the British administration.

➤ Who was the speaker of H.P. Vidhan Sabha in 1963?

Tapinder Singh
Des Raj Mahajan
Vidya Dhar
Drishan Chander

Des Raj Mahajan served as the Speaker of the Himachal Pradesh Vidhan Sabha in 1963, playing a crucial role in legislative proceedings.

➤ In which state of India is Karbi tribe mainly found?

Assam
Bihar
Nagaland
Manipur

The Karbi tribe is predominantly found in Assam, where they have a significant cultural presence and contribute to the region’s diversity.

➤ When was National Cadet Corps (NCC) established?

1948
1952
1955
1956

The National Cadet Corps (NCC) was established in 1948 to foster discipline, leadership, and a sense of patriotism among the youth.

➤ What was the original name of epic Mahabharata?

Raj Katha
Bharat Katha
Jai (Jaya) Samhita
Pandor Samhita

The epic Mahabharata was originally known as Jai (Jaya) Samhita, which signifies the victory and greatness of the story.

➤ Which day is observed as World Day for water?

February 15
March 22
April 10
May 21

World Water Day is observed on March 22 each year to raise awareness about the importance of freshwater and advocate for sustainable management of water resources.

➤ By which amendment was Dogri added in the 8^th schedule of Indian Constitution?

84^th
88^th
92^nd
96^th

Dogri was added to the 8^th schedule of the Indian Constitution by the 92^nd Amendment Act, recognizing it as a scheduled language.

➤ Abiy Ahmed won the 2019 Nobel prize for peace for ending Ethiopia’s border dispute with:

Sudan
Eritrea
Somalia
Yemen

Abiy Ahmed received the Nobel Peace Prize in 2019 for his efforts in resolving the long-standing border conflict between Ethiopia and Eritrea, which significantly improved relations between the two countries.

➤ In which country is Tripoli?

Liberia
Lesotho
Libya
Lithuania

Tripoli is the capital and largest city of Libya, located in North Africa along the Mediterranean coast.

➤ Who discovered the law of gravitation and motion?

Einstein
Ohm
Hertz
Newton

Sir Isaac Newton formulated the laws of gravitation and motion, which laid the foundation for classical mechanics and explained the fundamental principles governing the movement of objects.

➤ Which is the largest planet?

Neptune
Jupiter
Saturn
Mars

Jupiter is the largest planet in our solar system, known for its massive size and prominent features such as the Great Red Spot.

➤ Near which river is Surkotara Indus Valley civilization site?

Bhabar
Pabbar
Ghaggar
Bhogwa

The Surkotara site of the Indus Valley civilization is located near the Ghaggar River, which was an important river in ancient times.

➤ The term Opportunity Cost refers to

Variable Cost
Short-run cost
The cost forgone in favour of production of another product
Cost related to an optimum level of production

Opportunity Cost represents the value of the next best alternative that is forgone when a decision is made to allocate resources to a particular product or activity.

➤ Which of the following is not an accounting software package

QuickBooks
SAGE One
SAGE M
SAGE 50

SAGE M is not a recognized accounting software package, whereas QuickBooks, SAGE One, and SAGE 50 are popular accounting software products.

➤ UNCTAD stands for

United Nations Committee on Tariff and Development
United Nations Conference on Trade and Deficit
United Nations Conference on Trade and Development
United Nations Cause for Trade and Development

UNCTAD stands for the United Nations Conference on Trade and Development, which focuses on trade, investment, and development issues.

➤ Stock and debtor system is generally used when goods are sent to the branch at

Cost Price
An invoice price
Market Price
None of these

The stock and debtor system is commonly used when goods are sent to a branch at an invoice price, allowing for accurate tracking of inventory and receivables.

➤ Goods in transit are shown in the balance sheet of

Branch
Head Office
None of these
Both Head and Branch Office

Goods in transit are typically shown in the balance sheet of the Head Office, reflecting their value before they are received at the branch.

➤ The Receipts and Payments Account is merely a summary of

Cash Transactions
Credit Transactions
None of these
Under Installment Payment System

The Receipts and Payments Account provides a summary of cash transactions over a period, including all receipts and payments made.

➤ Under Installment Payment System:

The title of goods is passed on to the buyer immediately at the time of signing the agreement
The title of goods is passed on to the buyer after the payment of the final installment
Does not pass to buyer
None of these

Under the Installment Payment System, the title of goods is transferred to the buyer immediately upon signing the agreement, even though payment is made in installments.

➤ Cum dividend quotation of share means that the quotation includes

Dividend to be declared in future
Dividend declared recently but not paid
Does not pass to buyer
None of these

A cum dividend quotation includes the dividend that is expected to be declared in the future, reflecting the potential future return to the shareholder.

➤ The dissolution of a partnership

Leads to the discontinuance of business
Will lead to realization of assets
Both a and b
None of these

The dissolution of a partnership does not necessarily lead to the discontinuance of business or realization of assets; it primarily involves the formal end of the partnership agreement.

➤ Under Hire Purchase System, depreciation is charged on

Cash Price
Market Price
Sale Value of Asset
None of these

Under the Hire Purchase System, depreciation is charged on the cash price of the asset, reflecting its value from the time of acquisition.

➤ When the expenses of liquidation are to be borne by the purchasing company then it debits

Goodwill account
Realization account
Cash account
None of these

The purchasing company will debit the Goodwill account to cover liquidation expenses.

➤ Which method is known as dual method of share valuation

Yield method
Fair value method
Price earning ratio
Growth Model

The Fair Value method is known as the dual method of share valuation.

➤ Subsidiary books are also called as

Books of original entry
Cash flow statement
Income statement
All of these

Subsidiary books are referred to as Books of original entry.

➤ Which of the following varies with the quantity purchased

Cash discount
Trade discount
Both a and b
None of these

Trade discount varies with the quantity purchased.

➤ Current Assets of a company are worth Rs. 45000. Current ratio 2.5:1. What would be the amount of current liabilities?

18000
10000
9000
36000

The amount of current liabilities is calculated as Rs. 18000.

➤ In the light of AS-17, reportable segments are those in which total revenue from external sales and inter segment sales is

Equal to or more than 5% of the total revenue of all the segments
Equal to or more than 10% of the total revenue of all the segments
Equal to or more than 15% of the total revenue of all the segments
Equal to or more than 20% of the total revenue of all the segments

According to AS-17, reportable segments are those where the total revenue from external and inter-segment sales is 10% or more of the total revenue of all segments.

➤ In an operating lease, the lessee should recognize the benefit of incentives as

Reduction of rental expenses over the lease term on a straight-line basis
Reduction of rental expenses over the lease term on a proportionate basis
No recognition should be made
None of these

In an operating lease, benefits from incentives should be recognized as a reduction of rental expenses over the lease term on a straight-line basis.

➤ Which of the following is an accounting system of paying out and subsequently replenishing petty cash?

Imprest system
Double entry system
Reimbursement system
All of these

The Imprest system is used for managing petty cash through payment and subsequent replenishment.

➤ If the buyer fails to pay any installment then the seller has the right to repossession of goods under

Installment payment system
Hire Purchase System
Both Installment and hire purchase system
None of these

Under the Hire Purchase System, the seller has the right to repossess goods if the buyer fails to make any installment payments.

➤ The relationship between Consignor and Consignee is that of a

Partners of a firm
Principal and agents
Deputy Manager and Assistant manager
None of the above

The relationship between Consignor and Consignee is that of Principal and Agent.

➤ Family pension received by a widow of a member of the armed forces where the death of the member has occurred in the course of operational duties is

Exempt up to Rs 300,000
Totally exempted
Exempted up to Rs 350,000
Totally chargeable to tax

Family pension received by a widow of an armed forces member who died in operational duties is totally exempt from tax.

➤ Which among the following is an example of capital expenditure?

Premium paid for a lease
Legal expenses incurred in the purchase of land
Legal expenses incurred in raising a debenture loan
All of the above

Premium paid for a lease is an example of capital expenditure.

➤ Which among the following is a body set up under the Companies Act, 2013?

National Financial Reporting Authority
National Advisory Committee on Accounting Standards
Accounting Standard Board
None of the above

The National Financial Reporting Authority is a body established under the Companies Act, 2013.

➤ Accounting is a

Social science
Physical science
Biological science
None of these

Accounting is considered a social science.

➤ In the event of dissolution of a firm

Assets are realized and liabilities are paid off
Assets and liabilities are revalued
New balance sheet is drawn
None of the above

During the dissolution of a firm, assets are realized and liabilities are paid off.

➤ Which of the following comes under efficiency ratios?

Working capital Turnover ratio
Inventory turnover ratio
Fixed assets turnover ratio
All of the above

All of the listed ratios fall under efficiency ratios.

➤ Assertion (A): Mark-up pricing is a method of determining price.

Reason (R): P = ATC + (m x ATC) is the expression for that.

A is correct but R is not correct.
Both A and R are correct.
Both A and R are not correct.
R is correct, but A is not correct.

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

➤ Assertion (A): Marginal cost and differential cost do not convey the same meaning in all circumstances.

Reason (R): Differential cost increases or decreases due to change in fixed cost.

A is true but R is false.
A is false but R is true.
A and R are correct and R is the correct explanation of A.
Both A and R are correct, but R is not the correct explanation of A.

A and R are correct, and R is the correct explanation of A.

➤ Which one is more appropriate for cost of retained earnings?

Weighted Average Cost of Capital
Opportunity cost to the firm
Expected rate of return by the investor
None of these

The opportunity cost to the firm is a more appropriate measure for the cost of retained earnings.

➤ Which of the following is not included in the term income under Income Tax Act, 1961?

Profit in lieu of salary
Reimbursement of travelling expenses
Profit and gains of business or profession
Dividend

Profit in lieu of salary is not included in the term income under the Income Tax Act, 1961.

➤ Interest from public Provident Fund investment

Taxable under the head income from other sources
Taxable under the head income from business and profession
Exempted income
Allowed as deduction

Interest from public Provident Fund investment is exempted income.

➤ Transport allowance for commuting from place of residence to place of duty for an employee who is physically challenged such as blind/deaf/dumb or orthopaedically handicapped with disability of lower extremities exempted up to

3200
3000
2800
2400

The transport allowance for such employees is exempted up to Rs. 3200.

➤ PAN contains ……….. Alphabets

PAN contains 6 alphabets.

➤ ITR full form is

Income Tax rules
Income Tax return
Income tax rectification
None of these

ITR stands for Income Tax return.

➤ What is true for income tax slabs for resident individual above 80 years of age (Super Senior Citizen) for the assessment year 2019-20?

Upto 3 Lakh Nil
3,00,001 to Rs. 5,00,000 5% of (Total income minus Rs. 3,00,000) + 4% cess
For income between Rs 5,00,001 to Rs. 10,00,000 tax rate is 20% of the total income that is more than Rs. 5 lakh + 4% cess
Upto 6 lakh nil

For income between Rs 5,00,001 to Rs. 10,00,000, the tax rate is 20% of the total income that is more than Rs. 5 lakh plus 4% cess.

➤ What are the different classes of digital signature certificates?

Class 1 certificate
Class 2 certificate
Class 3 certificate
All of these

There are three classes of digital signature certificates: Class 1, Class 2, and Class 3.

➤ Which of the following is a taxable supply under GST Act?

Transportation of deceased person through a hired vehicle
Gift of office laptop by an employer to its employee on which ITC availed
A new laptop worth Rs. 45,000/- gifted by an employer to its employee
Fines/penalty/LD paid by a contractor to Govt. for delay/non-performance of contract

The gift of an office laptop by an employer to its employee, on which Input Tax Credit (ITC) was availed, is a taxable supply under GST Act.

➤ Which constitutional amendment is done to pass the GST bill?

101 amendment
110 amendment
120 amendment
115 amendment

The GST bill was passed through the 101st constitutional amendment.

➤ A Special Audit under GST is conducted by

Commissioner of GST
Joint commissioner with prior approval of CBIC
Chartered Accountant/Cost Accountant
All of the above

A Special Audit under GST is conducted by Chartered Accountant or Cost Accountant.

➤ GST was implemented in India from

1^st January 2017
1^st April 2017
1^st March 2017
1^st July 2017

GST was implemented in India from 1^st July 2017.