Commerce Group A May 2022 Paper

commerce group A questions

 The gross working capital is also known as Current Assets

Commodities is a thing possessing a value and uniform in quality generally mined or cultivated or produced in large amount of quantity by variety of producers.

The obligation of any business to protect and serve public interest is known as Corporate Social Responsibility (CSR).

A society that pools the land and other resources of its members and arranges for joint cultivation is called a cooperative farming society

The very purpose of entrenchment is Stabilizing law

Speculators seek to make profits in a short time frame by taking on high levels of risk

Auditing Question paper

Advanced Accounts question paper

Cost Accountancy Bcom Test Papers

Business Statistics June 2016 Test Papers

Investment s

Retired people or people having no regular sources of earnings with an investable lump sum amount can earn regular income in different ways. In India most popular instruments that can generate a regular income or can help someone withdraw money at regular intervals are:

1.Post Office MIS (Monthly Income Scheme)
2.Fixed Deposit
3.Senior citizen saving scheme
4.Monthly Income Plan of mutual funds (MIP)
5.SWP from mutual funds (Systematic Withdrawal plan)
6.Dividend from Mutual funds
7.Dividend from Equity
8.Annuity from Insurance companies
9.Rent from Real Estate
10.Long term Government Bond

People who mainly depend on fixed deposits or post office monthly income schemes for regular income often don’t realize that their money is losing value due to inflation. Their deposits continue to give out a fixed amount although their monthly requirement gradually goes up due to inflation. However, in the last three years monthly incomes have come down as much by 25 per cent as the interest rates have come down from 8.5 % to 6.5%. Those in the highest tax bracket feel the pinch the most as post-tax returns from deposits have come down to nearly 5 per cent. Keeping all this in mind, some of the alternatives that can be considered are monthly income plans (MIPs) and systematic withdrawal plan (SWP) in a debt mutual fund.

Monthly Income Plans (MIPs)

The Monthly Income Plan option for a regular income involves investing in Debt Mutual Funds with a monthly divided option. Most of these funds are conservative in their investment approach and allocate only 10-20% of their corpus into equities and the rest 80-90% in safer bonds and other debt instruments. The returns are not spectacular as compared to equity funds because of lower risk, but are enough to beat inflation. The attractiveness of MIPs is the relative safety they offer as these funds give investors good returns if stock markets do well, but they also protect the downside because of the limited exposure to equities.

From the taxation point also, MIPs are better than fixed deposits as the interest from fixed deposits is fully taxable. The post-tax returns from a fixed deposit that offers 8% are actually 5.6% for a person in the 30% tax bracket and this income is taxed every year even though he may get it only after the deposit matures. Also, if it exceeds a certain limit, it attracts TDS. So, there is no escape. On the other hand, gains from MIP funds are taxed only when the investor redeems the investment. Even then, only the gains are taxed and that too at a lower rate.

Investors should, however, be aware that though these plans are called “monthly income plans”, there is no assurance of monthly income. In fact, the dividend option of these funds is a very tax inefficient way to get a monthly income. Though the dividend received is tax-free, it comes to you after a heavy 28.84 per cent (25 per cent tax + 12 per cent surcharge + 3 per cent cess) dividend distribution tax on debt fund and 10% on equity funds. It is better to go for the growth option of the MIP fund and redeem units as and when you need the money.

You can also start a systematic withdrawal plan (SWP) under which a fixed sum is redeemed every month and put into your bank account.

MIPs can be good source schemes for systematic transfer plans (STP) into equity funds. In an STP, a fixed sum flows out of the scheme to another scheme (usually an equity fund) on a predetermined day of the month or quarter.
Be wary of the charges though. MIPs have high charges (some charge up to 2.5%), which can be a drag on the overall returns.

Systematic Withdrawal Plan (SWP)
Another better alternative to bank FDs is a systematic withdrawal plan (SWP) in a debt mutual fund. If you have invested in equity or debt mutual funds you can generate regular monthly income from mutual funds by selecting SWP (systematic withdrawal plan). SWP is a good option for those looking for income at fixed intervals, as SWP is a facility which allows investors to withdraw a specific amount of money from a mutual fund at regular intervals.

Most commonly, two options are available for SWP’s. In the first option, a fixed amount is withdrawn at a fixed intervals that could be monthly, quarterly, yearly etc. and in the second option, the appreciated amount is withdrawn on a fixed interval.

SWP in a debt mutual fund is tax effective than a bank fixed deposit. Although the dividend received in the hands of the investor is tax free, all non-equity investments attract DDT of 28.84%. The DDT is paid by the AMCs but eventually the investor has to pay. In a SWP, each withdrawal within 3 years from the date of purchase will be treated as a short-term capital gain. The gains will be added to the investor’s income and taxed accordingly. Withdrawal beyond 3 years from the date of purchase will attract long-term capital gains tax of 20%. But since the investor will enjoy indexation benefits, it is likely that investor is going to pay a lower amount in tax based on the indexed cost.

Which option is better for you and why?
Monthly cash flow requirements and tax efficiency are two most important factors that determine whether you should opt for dividend or the SWP option or MIP option. To summarize, for fixed monthly income, MIP and SWPs are two options. Under both these options investments are made in debt mutual funds. In the Monthly Income Plan the monthly income, however, is inconsistent as it depends on market conditions. Also in comparison to SWP’s, MIP’s are less tax efficient. Therefore, if one opts for a regular income investment plan, a systematic withdrawal plan is a superior alternative.

Income tax Updates 2018

Contrary to expectations, the Budget 2018 failed to do much for taxpayers as well as the salaried class. However, some sections of society, particularly senior citizens, gained much from its proposals. Whatever be the case, as a taxpayer we need to be aware of the tax proposals of this year's Union Budget as they are going to impact our earnings as well as the day-to-day lives from the upcoming financial year (2018-2019). Here we are taking a look at 10 such tax rules which will change from April 1, 2018:
1. Health and Education Cess
The Budget 2018 didn't make any changes in the tax rates or tax slabs for individuals and HUFs, which continue to remain the same for Assessment Year 2019-20 as applicable for AY2018-19. However, it has proposed a new cess – Health and Education Cess – which will be levied at the rate of 4% of income tax, including surcharge, in place of the current 3% Education, Secondary and Higher Education Cess from Financial Year 2018-19 onwards.
2. Reintroduction of standard deduction
At present no standard deduction is available for salaried employees. However, exemption in respect of transport allowance and reimbursement of medical expenses is provided. The Budget 2018 has proposed a standard deduction of a maximum of Rs 40,000. However, the current exemption in respect of transport allowance and reimbursement of medical expenses will be withdrawn. The net benefit will only be Rs 5,800.
3. Deduction in respect of interest earned by senior citizen
Currently, a deduction up to Rs 10,000 is allowed to all individuals in respect of interest income from deposit accounts (not being time deposits) held with any bank, co-operative society and post office.
It is proposed to allow a deduction up to Rs 50,000 in respect of interest income from deposits held with banks, co-operative society and post office by senior citizens. No separate deduction will be available under section 80TTA for interest income from savings account for senior citizens.
4. Medical treatment of senior citizens for specified diseases (Sec 80DDB)
Under the existing provisions, deduction is available to resident individuals and Hindu Undivided Family (HUF) for any amount incurred for the medical treatment of specified diseases (i.e. malignant cancers, AIDS, etc). The deduction is limited to Rs 60,000 for expenses relating to senior citizens and Rs 80,000 with respect to very senior citizens. The Budget has proposed to enhance the above deduction limit to Rs 100,000 uniformly for both categories.
5. Enhanced deduction for health insurance, medical expenditure related to senior citizens (Section 80D)
Under the existing provisions, a maximum deduction of Rs 30,000 is allowed to an individual or HUF for payment towards health insurance premium including Rs 5,000 towards preventive health check-up for resident senior citizens. Alternatively, very senior citizens can claim a deduction of Rs 30,000 for payment towards medical expenses where there is no insurance. The Budget 2018 has proposed a maximum deduction of up to Rs 50,000. Besides senior citizens can also claim the deduction for medical expenditure.
6. Compensation on termination or modification of employment
Currently, certain compensation in connection with employment is out of the purview of taxation, leading to base erosion and revenue loss.
"It is proposed that any compensation or other payments due to or received by any person in connection with the termination or the modification of the terms and conditions of any contract relating to his employment shall be taxable under the head income from other sources," according to a Deloitte report.

Money And Banking question Paper

FACULTY OF COMMERCE

B.A/B.com/B.Sc 2nd Year(3YDC) First Spell Examination, May 2009

Subject code No& Name:10 COMMERCE GROUP - C

Course Code No& Name: 02 – Money & Banking Theory &Practice

(Optionals)

Time:3Hours] [Max Marks:100

[Min Marks:35

SECTION- A

[Marks: 4x15= 60]

Instructions to the candidates:
a) Answer any FOUR of the following questions in about 30 lines each.
b) Each question carries 15 marks
1) Explain the role of money in the capitalistic economy.P14

A)IN CAPTALISTIC ECONOMICS NO AUTHORITIES EXISTS

2) What is Barter system ? Explain the inconveniences of Barter system.P2 & 3

3) "Loans Creates Deposits" . Discuss.

4) What is monetary policy ? What are its objectives?
5) Explain the functions of Primary Credit Societies.
6) Explain the liability of a Banker for Wrongful dishonor of cheques of a customer.
7) Explain the liability of the paying Banker on crossed cheque.
8) Discuss the various types of Bills of exchange.

SECTION –B
[Marks: 5x8 = 40]
Instructions to the candidates:
a) Answer any Five of the following questions in about 15 lines each.
b) Each question carries 8 marks
9) List out different kinds of Index numbers
10) Explain the difference between commercial banking and central banking.P106
11) Differentiate between Indigenous Banker and Regional Rural Bank.
12) Explain Garnishee Order.
13) Explain the legal Position of a Minor in Opening a bank account.
14) Explain the following :
a) Special Lien b) Recuring Deposit Account.
15) Describe the Cambridge equation of exchange.
16) List out the limitations of credit creation.
17) Explain the functions of State Cooperative Bank
18) Explain the following:
a) Banker's Bank P104  b) Clearing House.

Money and Banking Important Questions

EXPLAIN THE LIMITATIONS OF CREDIT CREATION?

Limitations of credit creation are:

(A)    Cash reserves: All the deposits cannot be used as credit creation some cash may be put as cash reserve which comes in the way of the commercial bank capacity of credit creation.

(B)    Good securities: it enhances bank safety. It can be converted into cash quickly without any loss. Availability of non-availability of such securities decides the capacity of banks credit creation.

(C)    Total Supply of money: Another important limitation to credit creation is the total supply of money in circulation.Money supply is controlled by the central bank. If the total supply of money is increased, credit creation can be increased and viceversa.

(D)   Habits of the people: Liquidity preference is the desire to hold cash. So if the liquidity preference is more the banks create less credit and vice versa.

(E)    Policies of the central bank: cash reserve ratio is determined by the central bank. So if the cash reserve increased, the banks will have less cash in hand and its credit creation capacity is decreased or vice versa.

(F)    Leakages: Due to improper flowing of funds from one bank to other leakage occurs thus harming the process of credit creation.

(G)   State Economy: During depression times traders borrow less and more during boom times. thus state of economy also limits creation.

Explain the main characteristics of cheque?

1.       A cheque is an instrument in writing. it must be written in ink

2.       It must contain an unconditional order. The order is expressed by the word “pay to”.

3.       If the payee did not encash it before the time limit, he should revalidate the cheque.

4.       It is drawn on a specified bank only and not on any person.

5.       The sum of money to be paid must be certain.it is an order to pay a specified sum of money on demand.

6.       If the drawer issues a cheque bearing a date before the date of issue it is called ante- dated cheque.

7.       If the drawer issues a cheque bearing a date after the date of issue it is called post- dated cheque.

8.       The banker has to honour the cheque when

·         it is complete in all aspects and drawn properly.

·         The customer has sufficient balance in his account.

·         IF the signature on cheque tallies with specimen signature.

·         The banker has no doubt about the bonafides of the holder.

EXPLAIN THE EFFECT OF WRONG ENTERIES IN THE PASS BOOK?

Entries to the advantage of the customer:

  If the pass book shows larger credit balance then the actual balance due to wrong entries and the customer withdraws it believing to be correct and spends it the banker is not entitled to recover the amount wrongly paid to the customer. But the customer has to prove.

• That he has no knowledge of the mistakes in the pass book
• That he altered his position by spending it.
• The customers’ right here is based on the principles of “Extroppel”.

Exception: if the customer regularly maintains his accounts and the banker sends the passbook in lieu of passbook regularly, if customer unable to prove that he is ignorant of the mistakes because he maintains his account regularly.The principle of Estoppel may not be applicable.

Banker sends confirmation slip to customer showing uto dae balance if customer signs and sends the  slip to the banker , the customer bound by it.

Effect of wrong entries in favour of the banker:

If it is favour to banker the legal position is as follows: The customer is entitling the mistake as soon as he identified. The customer is not expected to examine the passbook regularly. Therefore this right to get the mistake rectified does not lapse even if he returns the pass book without raising objection or remains silent.

But the right to rectification cannot be enforced when:

The customer’s action shows that he treated the entries as a settled account.

The customers negligence is proved.

EXPLAIN DRAFT?

Draft is nothing but a cheque drawn by one of the branches of a particular bank on the other branch of the same bank. It is a facility to customers as well as public to pay money in the places outside the branch which draws this cheque.

EXPLAIN ATM?

ATM is  nothing but automatic teller machine. This machine gives cash to the customers after inserting ATM cum debit card slot of the machine.

One can use for various reasons such as Pin no, withdrawl, mini statement etc.

Almost all the leading banks install these machines and facilitate withdrawl of money.

EXPLAIN DEBIT CARD?

Debitcard is nothing but ATM cum debit card. The card, as name suggests, will provide a customer of a bank access of ATM and merchant establishments all over the country as well as world. Provided sufficient balance in ones account in a bank. By using customer can avail withdrawal facility as well as online purchasing facility.

WHAT ARE THE PRECAUTIONS TO BE TAKEN BY THE BANKER IN OPENING ACCOUNTS IN THE NAME S OF MINORS AND MARRIED WOMEN?

Minors :

·         Below 18 age according to section 3 of Indian Majority act 1975.

·         If guardian is appointed by court they are considered  as minor upto 21.

·         A minor is not competent to contract according to the indian contract act 1872.

·         All agreements entered into by him are void except for those which are necessary for life and for his benefit.

·         A minor is not rebound to repay any money borrowed by him. He is entitled to recover any securities pledged by him.

Opening of Account:

·         Savings account can be opened but not current account.

·         Account can be joint with guardian.

·         Minor should attained the age of 14 years and he should know to read and write English, hindi or any regional language.

·         Banker should Obtain Minor date of birth and recorded in account.

·         Ordinarily cheques should not be collected in the account of the minor.

Loans:

·         A minor should  not be granted loans or overdraft because legally he is not bound to repay them. even a guarantee by thid arty is invalid.

·         The minor is entitled to recover any securities pledged by him for the loan.therefore, the banker cannot enforce either a secured or unsecured loan.

·         Loans can be given for the necessary of life with proof that it is purely for life only.

·         Minor cannot be a partner in a firm as he is not liable for ay losses or liabilities.banker must be very careful while sanctioning loans.

·         IN case of death of guardian before minor attains major, the amount can be paid to another guardian appointed by the court.

·         In case of death of minor the balance in the account can be taken by the guardian.

MARRIED WOMEN:

In india married women has right to contract. She can posses property in her name.  She can draw cheques, bills etc or endorse them the banker has to take the following precautions:

·         While opening account banker should enquire about her character, economic status, occupation and economic status of the husband. He must also ascertain whether she has right to sell or mortgaged her property.

·         Opening of Joint account with husband will be more beneficial in terms of security.

·         While granting a loan or overdraft the banker should carefully examine the nature of security she can offer because she can offer her own property but not his husband.

·         She can bind her husband assets for loan with consent and authority of the husband and in case of necessaries of life if husband does not provide them.

STATE THE OBJECTIVES OF REGIONAL RURAL BANKS?

Objectives of regional rural bank are:

·         To provide alternative sources of credit to the rural poor to free them from the clutches of money lenders.

·         To meet the growing needs of the rural poor and backward sections of the society.

·         To provide employment opportunities and develop entrepreneurship.

·         To combine the business goals of the rural areas with social obligations.

STATE THE OBJECTIVES OF COOPERATIVE BANKS?

Objectives of Cooperative bank are:

·         These banks was started in the year 1940 to relieve farmers form the clutches of money lenders and provide timely and adequate agricultural credit at low interest rates..

• ·         They have three-tier system
• ·         Cooperative credit societies
• ·         Cooperative central banks
• ·         State cooperative banks.

FACULTY OF COMMERCE

B.A/B.com/B.Sc 2nd Year(3YDC) First Spell Examination, May 2009
Subject code No& Name:10 COMMERCE GROUP - C
Course Code No& Name: 02 – Money & Banking Theory &Practice
(Optionals)
Time:3Hours] [Max Marks:100
[Min Marks:35
SECTION- A
[Marks: 4x15= 60]
Instructions to the candidates:
a) Answer any FOUR of the following questions in about 30 lines each.
b) Each question carries 15 marks
1) Explain the role of money in the capitalistic economy.P14

A)IN CAPTALISTIC ECONOMICS NO AUTHORITIES EXISTS

2) What is Barter system ? Explain the inconveniences of Barter system.P2 & 3

3) "Loans Creates Deposits" . Discuss.

4) What is monetary policy ? What are its objectives?
5) Explain the functions of Primary Credit Societies.
6) Explain the liability of a Banker for Wrongful dishonor of cheques of a customer.
7) Explain the liability of the paying Banker on crossed cheque.
8) Discuss the various types of Bills of exchange.

SECTION –B
[Marks: 5x8 = 40]
Instructions to the candidates:
a) Answer any Five of the following questions in about 15 lines each.
b) Each question carries 8 marks
9) List out different kinds of Index numbers
10) Explain the difference between commercial banking and central banking.P106
11) Differentiate between Indigenous Banker and Regional Rural Bank.
12) Explain Garnishee Order.
13) Explain the legal Position of a Minor in Opening a bank account.
14) Explain the following :
a) Special Lien b) Recuring Deposit Account.
15) Describe the Cambridge equation of exchange.
16) List out the limitations of credit creation.
17) Explain the functions of State Cooperative Bank
18) Explain the following:
a) Banker's Bank P104  b) Clearing House.

GST Advantages And Disadvantages

Benefits of GST | Advantages of Goods and Services Tax

Updated on May 26, 2017 - 03:23:54 PM

The Goods & Service Tax or GST is one of the biggest fiscal reforms in India since Independence. All businesses, small or large, will be impacted by this new indirect tax regime.

GST will be levied on both goods and services and will subsume and replace the current indirect taxes such as excise, VAT, and service tax.

Some of the benefits of GST to the Indian economy are listed below-

Removing cascading tax effect

An important benefit of the introduction of GST will be the removal of the cascading tax effect. In simple words, “cascading tax effect” means a tax on tax.

Under the current regime, the service tax paid on input services cannot be set off against output VAT. Under GST, the input tax credit can be availed smoothly across the spectrum of goods and services, thus reducing the tax burden on the end user and removing cascading effect.

Let’s take the following example to understand how removing the cascading effect will reduce taxes.

Current scenario

A trader buys office supplies for Rs. 20,000 paying 5% as tax. It charges 15% service tax on services of Rs. 50,000. Currently, he has to pay Rs. 50,000*15% = Rs. 7,500 without getting any deduction of Rs. 1,000 VAT already paid on stationery.

Under GST (assuming GST= 18%)

GST on service of Rs. 50,000 @18%	9,000
Less: GST on office supplies (20,000*18%)	3,600
Net GST to pay	5,400

This will be especially beneficial to industries that involve both goods and services (like restaurant business) and pay both VAT & Service Tax under the current regime.

Higher threshold for registration

Tax	Threshold Limits
Excise	1.5 crores
VAT	5 lakhs in most states
Service Tax	10 lakhs
GST	20 lakhs (10 lakhs for NE states)

As per the current VAT structure, any business with a turnover of more than Rs. 5 lakh (in most states) is liable to pay VAT (different rates in different states). Similarly, for service tax, service providers with turnover less than Rs. 10 lakhs are exempted.

Under GST this threshold has been increased to Rs. 20 lakhs thus exempting many small traders and service providers.

Composition scheme for small businesses

GST also has an optional scheme of lower taxes for small businesses with turnover between Rs. 20 to 50 lakhs. It is called the composition scheme. This will bring respite from tax burdens to many small businesses.

Simpler online procedure under GST

The entire GST process – starting from registration to filing returns and payment of GST tax – is online. Startups do not have to run around to tax offices to get various registrations under excise, VAT, service tax.

Lesser number of compliances

Also, the current tax regime has excise VAT and service tax, each of which have their own returns and compliances.

Tax	Return filing
Excise	Monthly
Service tax	Proprietorship/Partnership- Quarterly Company/LLP- Monthly
VAT	Different for different states Some states require monthly returns over a threshold limit. Some states like Karnataka require a monthly return

GST will unify all these, thereby reducing the number of returns and the time spent for tax compliances. There are about 11 returns under GST, out of which 4 are basic returns which apply to all taxable persons under GST.

Defined treatment for e-commerce

Many Indian businesses provide goods and services through the internet. Earlier, there were no specific provisions for treatment of the e-commerce sector. Currently, states have variable VAT laws for this sector. For example, online websites (like Flipkart and Amazon) delivering to Uttar Pradesh have to file a VAT declaration and the registration number of the delivery truck. Tax authorities can sometimes seize goods when there is a failure to produce documents.

Again, these e-com brands are treated as facilitators or mediators by states like Kerala, Rajasthan, and West Bengal which do not require them to register for VAT.

All these differential treatments and confusing compliances will be removed under GST. For the first time, GST clearly maps out the provisions applicable to the e-commerce sector and since these will apply all over India, there should be no complication regarding inter-state movement of goods anymore.

Click here for detailed analysis of the impact of GST on e-commerce.

Increased efficiency in logistics

The logistics industry in India had to maintain multiple warehouses across states to avoid the current CST and state entry taxes on inter-state movement. Most of the times, these warehouses were forced to operate below their capacity thus increasing their operating costs.

When GST goes live, these restrictions on inter-state movement of goods will be lessened and the logistics sector might start consolidating warehouses across the country. As an outcome of GST, warehouse operators and e-commerce players have already shown interest in setting up their warehouses at strategic locations such as Nagpur, which is the zero-mile city of India, instead of every other city on their delivery route.

Reduction in unnecessary logistics costs will increase profits for businesses involved in supply of goods through transportation.

Visit here to read more about the impact of GST on logistics.

Regulating the unorganized sector

Certain industries in India like construction and textile are largely unregulated and unorganized. GST has provisions for online compliances and payments, and availing of input credit only when the supplier has accepted the amount, thereby bringing accountability and regulation to these industries.

Conclusion

There is no doubt that GST is aimed at increasing the taxpayer base by bringing SMEs and the unorganized sector under its purview. This will make the Indian market more competitive than before and create a level playing field between large & small enterprises. Further, Indian businesses will be able to better compete with foreign countries such as China, Philippines, and Bangladesh.

However, all will not be smooth sailing. A policy change of such a huge nature is sure to be faced with teething troubles. Experts have also identified some of the disadvantages of GST implementation which could be a cause for worry for some industries.