CS Executive Practice Set 1

The primary sources of law in India include legislation, judicial precedent and

1. A.Custom✓
2. B.Folklore
3. C.Religious text exclusively
4. D.Media reports

Correct answer: A

The term 'jurisprudence' refers to the

1. A.Theoretical and philosophical study of law and legal systems✓
2. B.Practice of criminal litigation exclusively
3. C.Drafting of commercial contracts
4. D.Planning of corporate tax strategy

Correct answer: A

The 'Golden Rule' of statutory interpretation is applied when a purely literal interpretation of a statute would lead to

1. A.An absurd, unjust or inconsistent result, permitting the court to modify the meaning to avoid it✓
2. B.A criminal offence in every case
3. C.An automatic tax benefit for the assessee
4. D.A need for a constitutional amendment

Correct answer: A

Fundamental Rights are guaranteed to citizens under which Part of the Constitution of India?

1. A.Part III✓
2. B.Part IV
3. C.Part V
4. D.Part XX

Correct answer: A

The writ issued by a court directing a public authority to perform a public duty it has failed or refused to perform is called

1. A.Habeas Corpus
2. B.Mandamus✓
3. C.Certiorari
4. D.Quo Warranto

Correct answer: B

Under the Consumer Protection Act, the definition of 'consumer' specifically excludes a person who buys goods or avails services for

1. A.Personal or household use
2. B.Resale or a commercial purpose✓
3. C.Self-employment purposes, using his own labour, to earn his livelihood
4. D.Use by family members

Correct answer: B

A company comes into legal existence with effect from the date mentioned in its

1. A.Certificate of Incorporation✓
2. B.Memorandum of Association alone
3. C.Prospectus
4. D.First Board resolution

Correct answer: A

A debenture holder of a company is, in relation to the company, a

1. A.Creditor✓
2. B.Owner/shareholder
3. C.Employee
4. D.Statutory auditor

Correct answer: A

Under Section 149 of the Companies Act, 2013, an independent director is eligible to hold office for a maximum of

1. A.Two consecutive terms of up to five years each (subject to re-appointment by special resolution)✓
2. B.One continuous term of ten years, without any break
3. C.Life tenure, once appointed
4. D.One year, non-renewable

Correct answer: A

A scheme of compromise or arrangement between a company and its creditors/members under the Companies Act, 2013 requires the sanction of the

1. A.National Company Law Tribunal (NCLT)✓
2. B.Registrar of Companies alone
3. C.Reserve Bank of India
4. D.Central Government alone

Correct answer: A

Under the Insolvency and Bankruptcy Code, 2016, the Corporate Insolvency Resolution Process (CIRP) must ordinarily be completed within

1. A.180 days, extendable up to a maximum of 330 days✓
2. B.30 days, with no extension
3. C.1,000 days
4. D.There is no prescribed time limit

Correct answer: A

Arbitration, as governed by the Arbitration and Conciliation Act, 1996, is a method of

1. A.Alternative dispute resolution outside the regular court system✓
2. B.Initiating a criminal prosecution
3. C.Amending the Constitution
4. D.Passing a company board resolution

Correct answer: A

A business entity in which the owner has unlimited personal liability and the business has no separate legal identity from the owner is a

1. A.Sole Proprietorship✓
2. B.Private Limited Company
3. C.Limited Liability Partnership
4. D.Public Limited Company

Correct answer: A

SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) is an integrated web form used for the

1. A.Incorporation of a company in India✓
2. B.Filing of income tax returns
3. C.GST registration exclusively
4. D.Renewal of trademarks

Correct answer: A

Udyam Registration is a government registration meant for

1. A.Micro, Small and Medium Enterprises (MSMEs)✓
2. B.Large multinational corporations only
3. C.Foreign companies operating in India
4. D.Government departments

Correct answer: A

The 'Startup India' initiative of the Government of India was launched in

1. A.2016✓
2. B.2005
3. C.1991
4. D.2020

Correct answer: A

A private company may be converted into a public company primarily by

1. A.Altering its Articles of Association by passing a special resolution and complying with related requirements✓
2. B.Merely filing its annual return
3. C.Simply changing its registered name
4. D.Without any regulatory approval or filing

Correct answer: A

A company registered under Section 8 of the Companies Act, 2013 is formed to promote objects such as commerce, art, science, sports, education or charity, and

1. A.Is prohibited from distributing dividends to its members✓
2. B.Must maximise dividend payouts to shareholders
3. C.Exists primarily to trade in securities
4. D.Is formed mainly for real estate speculation

Correct answer: A

The rates of income tax applicable for a particular assessment year are prescribed each year by the

1. A.Finance Act✓
2. B.Income-tax Rules alone
3. C.State Government
4. D.Reserve Bank of India

Correct answer: A

'Total Income' of an assessee is arrived at after deducting from the 'Gross Total Income' the

1. A.Deductions available under Chapter VI-A✓
2. B.TDS already deducted
3. C.Advance tax already paid
4. D.Surcharge payable

Correct answer: A

Under the GST law, the general threshold limit of aggregate turnover for compulsory registration of a supplier of goods (in most States) is

1. A.Exceeding ₹40 lakh✓
2. B.Exceeding ₹1 lakh
3. C.Exceeding ₹10 lakh only, for all States
4. D.There is no threshold; every supplier must register

Correct answer: A

The final accounts of a trading business typically comprise the Trading Account, the Profit and Loss Account, and the

1. A.Balance Sheet✓
2. B.Cash Book
3. C.Journal
4. D.Ledger

Correct answer: A

A Fund Flow Statement is primarily used to analyse the changes in a firm's

1. A.Working capital position between two Balance Sheet dates✓
2. B.Cash balance alone
3. C.Net profit for the year alone
4. D.Share capital alone

Correct answer: A

The Current Ratio of a firm is calculated as

1. A.Current Assets divided by Current Liabilities✓
2. B.Fixed Assets divided by Current Liabilities
3. C.Current Assets divided by Fixed Liabilities
4. D.Net Profit divided by Current Assets

Correct answer: A

The Securities Contracts (Regulation) Act, 1956 primarily regulates

1. A.Trading in securities and the functioning of recognised stock exchanges✓
2. B.Incorporation of companies
3. C.Assessment of income tax
4. D.Labour welfare schemes

Correct answer: A

The Securities and Exchange Board of India (SEBI) was established as a statutory regulatory body under the SEBI Act in

1. A.1992✓
2. B.1956
3. C.2013
4. D.2000

Correct answer: A

Dematerialisation, under the Depositories Act, 1996, refers to the process of converting

1. A.Physical share certificates into electronic (book-entry) form✓
2. B.Electronic securities into physical certificates
3. C.Debt instruments into equity shares
4. D.Preference shares into equity shares

Correct answer: A

The market in which new securities are issued by companies for the first time is known as the

1. A.Primary market✓
2. B.Secondary market
3. C.Money market
4. D.Foreign exchange market

Correct answer: A

A mutual fund pools money from a number of investors and invests it in a

1. A.Diversified portfolio of securities, managed by professional fund managers✓
2. B.Single stock chosen by one investor
3. C.Real estate assets exclusively
4. D.Physical gold exclusively

Correct answer: A

A downgrade in the credit rating of a debt instrument generally indicates

1. A.An increased perceived risk of default by the issuer✓
2. B.Improved creditworthiness of the issuer
3. C.No change in the risk profile of the instrument
4. D.A guarantee of full and timely repayment

Correct answer: A