KSET Commerce Solved Paper 2014 [Paper II]

KSET Solved Question Paper Commerce

[Time: 1 hour 15 Minutes , 75 Minutes; Maximum Marks: 100]

Note: This paper contains fifty(50) multiple choice questions, each carrying Two (2) marks. Attempt All questions.

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

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

1. The company which invests, produces, markets and operates across the world is called

(A) Global Company.

(B) Multinational Company.

(D) Transnational Company.

Ans: (D) Transnational Company.

2. The key drivers of globalisation are

(A) Govt. action privatisation, cost and competition.

(B) Cost advantages, economic cycles, Govt. action and competition.

(D) Govt. policies, cost, market and competition.

Ans: (D) Govt. policies, cost, market and competition.

3. Statements:

(1) Threat of entrant is the possibility of a potential competitor entering a different market.

(2) Threat of substitute is high if the substitute product provides a higher perceived value or benefit.

(A) (1) is correct (2) is incorrect.

(B) (2) is correct (1) is incorrect.

(D) Both are incorrect.

Ans: (B) (2) is correct (1) is incorrect.

4. Match the following:

Name of the

Trading Block

Member

Countries

(a) NAFTA.

(b) AMU.

(d) SAPTA.

(1) Australia, New Zealand.

(2) US, Canada, Mexico.

(3) SAARC countries.

(4) Algeria, Libya, Mauritania.

Code:

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

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

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

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

5. Factors preventing a potential competitor entering the market are

(a) Income of consumers.

(b) High capital costs.

(d) Govt. policy.

Codes:

(A) (d) and (b).

(B) (c) and (d).

(D) (a) and (d).

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

6. Which one of the following should be considered as revenue expenditure?

(A) Rs. 1,000/- paid for erection of a new plant.

(B) Cost of Rs. 10,000 incurred in increasing the sitting accommodation of a hotel.

(D) Repairs to second hand machinery purchased.

Ans: (C) Damages paid on account of breach of a contract to supply certain goods.

7. A and B are sharing profits in the ratio of 3:2. They admit a new partner C with 1/5 share in profits of the firm. The new profit sharing ratio between the partners will be

(A) 12 : 8 : 5.

(B) 8 : 12 : 5.

(D) 3 : 2 : 1.

Ans: (A) 12 : 8 : 5.

8. Which one of the following statements is incorrect?

(A) Share premium received on issue of shares can be utilized for writing off the preliminary expenses of the company.

(B) Capital redemption reserve is available only for issuing fully paid bonus shares.

(D) Right shares issued to the existing equity shareholders are called pre-emptive right.

Ans: (C) Discount on issue of shares is shown as a reduction from capital account in the balance sheet.

9. Match List – I with List – II:

List – I

List – II

(a) Financial Leverage.

(b) Quick ratio.

(d) Margin on sales.

(1) Efficiency.

(2) Profitability.

(3) Risk.

(4) Liquidity.

Code:

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

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

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

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

10. Which of the following affect the break even point?

(1) Number of units sold.

(2) Variable cost per unit.

(3) Total fixed cost.

(4) Margin of safety.

(A) (1), (3) and (4).

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

(D) (1) and (3).

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

11. The demand curve of a monopolist is

(A) Parallel to X-axis.

(B) Parallel to Y-axis.

(D) Rises upward from left to right.

Ans: (C) Slopes downwards from left to right.

12. If the point elasticity of demand is equal to one, the marginal revenue will be equal to

(A) Average Revenue.

(B) Zero.

(D) Negative.

Ans: (B) Zero.

13. Assertion (A): If the two factors of production are complements, the marginal rate of technical substitution between them does not diminish.

Reason (R): If the two factors of production are complements, it implies that they are used in fixed proportions.

Codes:

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

(B) (A) is correct and (R) is incorrect.

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

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

14. Match the following:

List – I

List – II

(a) Giffin paradox.

(b) Conspicuous consumption.

(d) Optimum factor combination.

(1) Status symbol commodity.

(2) Expansion path curve.

(3) Isoquant.

(4) Law of demand.

Code:

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

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

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

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

15. Which of the following is (are) correct?

(1) Exceptional demand curve slopes upward.

(2) Exceptional demand curve slopes downward.

(3) Generally demand curve slopes upward.

(4) Generally demand curve remains vertical.

Codes:

(A) (1) and (2).

(B) Only (1).

(D) (2), (3) and (4).

Ans: (B) Only (1).

18. Decision maker makes decisions at the appropriate significance level by determining the cost of

(1) Performing the test.

(2) Type-I error.

(3) Type-II error.

Codes:

(A) (1) and (2).

(B) (1) and (3).

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

Ans: (C) (2) and (3).

19. Assertion (A): The numerical value of coefficient of correlation explains total variation in dependent variable.

Reason (R): The numerical value of coefficient of determination explains that fraction of total variation that is explained.

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

(B) (A) is correct and (R) is incorrect.

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

Ans: (C) (A) is incorrect and (R) is correct.

20. Match the following:

List – A

(Sum of Squares)

List – B

(Degrees of Freedom)

(a) SSC.

(b) SSR.

(d) SST.

(1) (n – 1).

(2) (c – 1).

(3) (r – 1).

(4) (c – 1) (r – 1).

Code:

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

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

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

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

21. “An ideal organisation to be bureaucracy, whole activities and objectives were rationally thought and whose divisions of labour were explicitly spelled out”.

Who considered the above statement?

(A) Chester I. Bernard.

(B) Max Weber.

(D) Henry L. Gantt.

Ans: (B) Max Weber.

22. The key elements of organisational behaviour are

(A) Motivation, direction and leadership.

(B) Group of people who work interdependently.

(D) People, structure and technology.

Ans: (D) People, structure and technology.

23. Arrange the following motivating needs in the order of ascendance as identified by Maslow.

(1) Esteem needs.

(2) Safety needs.

(3) Physiological needs.

(4) Social needs.

(5) Self actualisation needs.

Codes:

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

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

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

Ans: (C) (3), (2), (4), (1) and (5).

24. Statements:

(1) Robert Owen is known as the father of modern personnel management.

(2) Prof. Mayo conducted time and motion studies at Hawthorne works of Western Electric Company.

Codes:

(A) Both are true.

(B) Both are false.

(D) (1) is false, (2) is true.

Ans: (C) (1) is true, (2) is false.

25. Match the following:

List – I

List – II

(a) Habit.

(b) Cohesion.

(1) Organisational level.

(2) Individual level.

(3) Group level.

Code:

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

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

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

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

26. “Marketing is gardening”. This implied in

(A) The product concept.

(B) The selling concept.

(D) The holistic marketing concept.

Ans: (C) The marketing concept.

27. Product – Market Expansion grid was proposed by

(A) P. F. Drucker.

(B) Michael Porter.

(D) Theodore Levitt.

Ans: (C) Ansoff.

28. Which of the following is (are) responsible for strategic planning gap?

(1) Intensive growth.

(2) Integrative growth.

(3) Diversification growth.

Codes:

(A) (1) and (2).

(B) (1) and (3).

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

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

29. Assertion (A): Market development strategy enables the company to gain more market share.

Reason (R): Diversification strategy leads to an increase in market share.

Codes:

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

(B) (A) is correct and (R) is incorrect.

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

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

30. Match the following:

List – I

List – II

(a) Width of product-mix.

(b) Depth of product-mix.

(d) Consistency of product-mix.

(1) Number of variants in the product line.

(2) Closely related product lines.

(3) No. of items in the product mix.

(4) Number of product lines.

Codes:

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

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

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

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

31. According to Walter model, if ‘r’ is the internal rate of return, ‘g’ is the growth rate and ‘k’ is the cost of capital under which of the following conditions the optimal payout ratio is 100%?

(A) r = k_e.

(B) r < k_e.

(D) g > k_e.

Ans: (B) r < k_e.

32. Which of the following is not a ‘value driver’ that affects the value of a firm according to Alcar model?

(A) Operating profit margin.

(B) Cost of capital.

(D) Income Tax Rate.

Ans: (C) Book value of the firm.

33. Since companies in some industries have high fixed costs, but have stable and predictable revenues, which of the following statement would be true about these companies?

(A) The degree of operating leverage is relatively low.

(B) Their bond issues would tend to have a speculative rating.

(D) They are unable to take on much additional financial risk.

Ans: (C) Their overall business risk is relatively low.

34. X Co. has target ROE of 14%. The financial leverage of the company is 0.5. The corporate rate tax applicable to the company is 30%. If the average cost of debt is 9.5%, the ROI that the company should earn to achieve the target ROE is

(A) 16.5%.

(B) 18.25%.

(D) 20.20%.

Ans: (A) 16.5%.

35. Match List – I with List – II:

List – I

List – II

(a) Operating Income.

(b) Capital employed.

(d) Gross cash flow.

(1) Cost of goods sold to average stock.

(2) Profit before depreciation, interest and tax.

(3) Next fixed assets investment and networking capital.

(4) Total funds invested.

(5) Profits before interest and taxes.

Codes:

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

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

(D) (a)-(5), (b)-(3), (c)-(1), (d)-(2).

Ans: (D) (a)-(5), (b)-(3), (c)-(1), (d)-(2).

36. The individual who recognised the link between pay and performance for the first time

(A) Elton Mayo.

(B) F. W. Taylor.

(D) Kohn.

Ans: (B) F. W. Taylor.

37. ________ contains data about each employee’s skills, abilities and work experience etc.

(A) Bio-data.

(B) Personnel record.

(D) Appraisal form.

Ans: (C) Skills inventory.

38. Statements:

(1) An arbitrator is an outside third party who is brought into settle a dispute and he or she has the authority to make a decision.

(2) Man power planning is needed in order to identify an organisations need to have optimum workforce.

Codes:

(A) Both are correct.

(B) Both are incorrect.

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

Ans: (A) Both are correct.

39. Match the following:

(a) Personality.

(b) Aptitude.

(d) Performance appraisal.

(1) Ability to do the job.

(2) Stable pattern of behaviour.

(3) Measuring the performance.

(4) Capacity to acquire skill.

Codes:

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

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

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

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

40. Which of the following statements are true?

(1) The term salary is commonly used for those employees whose pay is calculated according to the number of hours worked.

(2) The word dynamics is derived from a Greek word which means power.

(3) Time scale for performance appraisal is usually one year.

(4) Human relations theory focuses on informal organisation.

Codes:

(A) (1) and (2) are correct, (3) and (4) are incorrect.

(B) (1) and (2) are incorrect, (3) and (4) are correct.

(D) (1), (2) and (3) are correct, (4) is incorrect.

Ans: (B) (1) and (2) are incorrect, (3) and (4) are correct.

41. The concept of Mutual Funds was started with Unit Schemes of Unit Trust of India in ________ in ________.

(A) 1974, India.

(B) 1982, Canada.

(D) 1964, India.

Ans: (D) 1964, India.

42. Ad hoc Treasury Bills are issued in favour of ________ only.

(A) Commercial Banks.

(B) Scheduled Banks.

(D) Regional Rural Banks.

Ans: (C) Reserve Bank of India.

43. Which of the following liabilities are taken into account for acid test ratio?

(1) Outstanding expenses.

(2) Bills payable.

(3) Bank overdraft.

(4) Trade creditors.

(5) Redeemable debentures.

Codes:

(A) (1), (2), (3) and (4).

(B) (1) and (2) only.

(D) All of the above.

Ans: (A) (1), (2), (3) and (4).

44. Statements:

(1) The debit card will free you from carrying cash or a cheque book.

(2) Debit cards are readily accepted than cheques.

Codes:

(A) Both are incorrect.

(B) Both are correct.

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

Ans: (B) Both are correct.

45. Match the following:

List – I

Bank

List – II

Merged with

(a) New Bank of India.

(b) Bank of Madura.

(d) Global Trust Bank.

(1) Punjab National Bank.

(2) HDFC Bank.

(3) Oriental Bank.

(4) ICICI Bank.

Code:

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

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

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

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

46. Which of the following is an account that shows the transactional relationship between countries?

(A) Capital account.

(B) Balance of payments accounts.

(D) Current account.

Ans: (B) Balance of payments accounts.

47. In which of the following levels of economic integration, do the member countries have common currency, fiscal and monetary policies?

(A) Free Trade Area.

(B) Customs Union.

(D) European Union.

Ans: (C) Economic Union.

48. Which of the following statements is/are true regarding in foreign exchange market?

(1) A higher spread indicates higher trade in the currency.

(2) A very low spread is an indication of high liquidity in the markets for the currency.

(3) Bid is the price at which the dealer will sell the currency and aks is the price at which the dealer buys the currency.

Codes:

(A) Only (1) above.

(B) Only (2) above.

(D) Both (1) and (3) above.

Ans: (B) Only (2) above.

49. Which of the following covers agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs)?

(1) Enforceable rights in trade.

(2) Logical method of claiming property.

(3) Intellectual property.

Codes:

(A) Only (3) above.

(B) Both (2) and (3) above.

(D) Both (1) and (3) above.

Ans: (A) Only (3) above.

50. Match List – I with List – II:

List – I

List – II

(a) EOUs, SEZs, EHTPs, STPs.

(b) BOP.

(d) Leading.

(1) Trade Deficit.

(2) International Economic Institutions.

(3) Export Houses.

(4) Advance payment of Foreign Borrowings.

(5) Foreign Borrowings in Advance.

Code:

(A) (a)-(3), (b)-(1), (c)-(2), (d)-(5).

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

(D) (a)-(2), (b)-(1), (c)-(3), (d)-(5).

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

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KSET Commerce Solved Paper 2014 [Paper II]