2022 PHASE 1 PAPER 2 | 30

===========ANSWERS============= section of the syllabus. The nature of the question is very basic as
it is just asking you to identify the intangible asset.

Commerce and Accountancy The two categories of assets are taught to students in Class 11th.
So, you can see the level of this question is easy. If you just know
the meaning of the term, Intangible then also you will find this
Q.1) (b)
question doable. As all options other than (a) can be touched.
Explanation:
Q.5) (a)
This question was asked from the Commerce and Accountancy
Explanation:
section of the syllabus. This is a conceptual question. If you
have read about qualitative characteristics of accounting, then
This question was asked from Commerce and Accountancy. This
you must be aware of the fact, that there are four qualitative
is a conceptual question. Options have been framed in an order to
characteristics of accounting which are, verifiability, relevance,
confuse you, but you can use elimination skills in this question.
reliability, and comparability.
Renunciation of right share is a process of renouncing, transferring
The examiner has kept Accountability in the options to confuse
or selling of the right to other interseted investors at a better price.
you. If you don’t know the Qualitative Characteristics exactly
then you will think Accountability is also a qualitative feature
Q.6) (a)
because in general terms it is a qualitative feature but IT IS NOT
Explanation:
A QUALITATIVE FEATURE IN ACCOUNTING TERMS.
This question was asked from the Commerce and Accountancy
The takeaway from this question is, study properly and memorize
section of the syllabus. This is a conceptual question. If you have
the key facts from every chapter otherwise you will find the paper
studied Methods of Preparing Account Current then you can do
difficult.
this question easily as all interests other than Red Ink Interest
don’t even exist.
Q.2) (a)
Explanation:
You must be aware of the fact if the due date of a bill is after the
date of closing the account, then we charge no interest for that.
This question was asked from the Commerce and Accountancy
We just write that interest in Red-Ink in the relevant side of the
section of the syllabus. This is a factual question. Through this
Account current.
question, examiner wants to check your retention power. You
should learn all the important Indian Accounting Standards with
Q.7) (e)
numbering for adding up 2 marks in your scorecard.
Explanation:
Q.3) (a)
This question was asked from the Commerce and Accountancy
Explanation:
section of the syllabus. This is a conceptual question. While
studying about Profit and Loss Account you must have studied
This question was asked from the commerce and accountancy
about Exceptional Items and Extraordinary items. Don’t get
section of the syllabus. The first thing that you should observe
confused between the two.
after reading this question is the use of the word INCORRECT
in the statement. Please be very careful with SUCH EXTREME
Both are unusual expenses that are large enough to have an
WORDS in the questions. These words are intentionally used by
impact on the financial results. However, extraordinary items are
examiners to check your level of alertness.
not part of a company’s ordinary business dealings. Exceptional
items are.
As this is a conceptual question, if you have read the topic of
debenture well, then you can figure out that all options other than
Please be attentive while reading the question as there is the use
(a) are features of debentures.
of the word “NOT” in the question. And the only option that is
not shown under the exceptional item is option (e).
And if you read the question carefully, you will find, that the very
first line states that debenture is a long-term business debt. So, in
NOTE: We are not providing you a detailed list of exceptional
no case, you can call it owned capital.
items here because our target is to equip you with the approach
of solving objective papers. In this question, we have emphasized
Q.4) (a)
the areas where you can make mistakes.
Explanation:
Q.8) (d)
This question was asked from the Commerce and Accountancy
Explanation:

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This question was asked from the Commerce and Accountancy The question is in respect of sharing responsibility and authority
section of the syllabus. This is a conceptual question that also so, how can clarity of objective, training policy, and learning
tests your factual knowledge. There are various conditions for period be the answer? So, you can eliminate option (b), (c), and
buy-back of shares and you have to identify the right one from (d).
the options available.
Now, if you compare options (a) and (e), you will find option
In option (a), the word NOT has been used to make the option (a) fits best here, as the very meaning of the term ‘delegation’ is
incorrect. You will observe this thing in other questions as sharing responsibility.
well. Examiner in many cases uses NOT to make the statement Q.12) (a)
incorrect. So, you should get extra alert whenever you see NOT Explanation:
in your question. You can eliminate (a) here.
This question was asked from the management section of the
There are various conditions regarding the buyback of shares. syllabus. If you have studied various theories in management
You must have studied those in detail while doing questions then you can do this question easily otherwise it is a hard nut to
on Shares. Here, all the conditions other than in option (d) are crack.
hypothetical and need to get eliminated. You can hardly use any of the tricks discussed above to solve
this question because of the factual nature of this question. In the
Q.9) (b) previous questions, I have already discussed the reason behind
Explanation: framing of factual questions.

This question was asked from the Commerce and Accountancy Q.13) (b)
section of the syllabus. This question not only checks your Explanation:
fundamental knowledge but also checks your retention power.
In accounting, there are three types of expenditure: Capital This question was asked from the management section of the
Expenditure, Revenue Expenditure, and Deferred Revenue syllabus. This question is an easy catch for you if you have
Expenditure. So, there are high chances that you might get studied various roles of a leader.
confused in these three types if your fundamentals are not clear. You can eliminate option (c) here, as the term ‘exchange’ is
The takeaway from this question is whenever there are types in incomplete in itself. Examiner has not clearly specified, exchange
a particular topic then you should use some trick to distinguish of what? Whether, exchange of views and ideas or anything else?
among the types. In rest of the options, you can figure out the characteristics of a
leader and the roles played by him. Now, you need to brainstorm
Q.10) (a) on every option and then reach the right one. And after
Explanation: brainstorming you will find, that no option other than networker
is satisfying the need of the question.
This question was asked from the Commerce and Accountancy But yes, you can reach the correct answer only if you are calm
section of the syllabus. This topic is not explicitly mentioned during the exam otherwise you can get confused among the
in your syllabus. But if you have understanding of contingent options.
liabilities then you can use elimination skills in this question.
Option (b) is not relatable to the question being asked. Q.14) (c)
Option (c) and option (d) are classified as Contingent Liabilities. Explanation:
Thus, you can eliminate these two options.
Arrears of fixed cumulative dividends on preference shares are This question was asked from the management section of the
disclosed separately and they are not a part of commitments. syllabus. This is a very easy question because the options in this
Hence, you can eliminate option (e) as well. question have been framed in a manner to help you.
Only, option (a) can be classified as commitment. Thus, it is the In many questions, you will realise that examiner has tried to help
answer. you in reaching the right answer. Examiner frame these kinds of
questions to check whether you can catch the hint given by him
or not.
Management Here in this question, options other than ‘supervision’ are just
irrelevant.

NOTE: We are not providing you the definition of each and

Q.11) (a)
every option because our aim is to take you on a tour to examiner
Explanation:
mind. Here, in this question, we have explained the intention of
the examiner behind framing such questions.
This question was asked from the management section of the
syllabus. You can use elimination skills to solve this question.
Q.15) (d)

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Explanation:

This question was asked from the management section of the

Finance
syllabus. Questions directly from the syllabus always act like
bonus points for you, and you should never miss the opportunity Q.19) (e)
to get marks from straightforward questions. Explanation:
If you have studied various styles of leadership then you will
definitely do this question right. Else, you can use elimination This question was asked from the finance section of the syllabus.
skills in some options. It is a factual question with some information on NBFC. All
As you know autocracy is linked with showing authority i.e., information provided to you is not always useful. There are two
controlling everything rather than letting people decide things purposes of providing information. Firstly, the examiner wants
for themselves. So, there is no scope for transparency and you to waste your time and then see how you respond. Secondly,
genuineness in autocracy. Hence, you can eliminate option (a). the examiner wants to provide you hints through such information
Similarly, servant leadership cannot be the answer because under and see if you can catch them or not.
servant leadership an individual interacts with others to achieve Here, the information given is of no use to you as you just have
authority. You can eliminate option (e) as well. to answer the maximum period of deposits.
Rest of the options are positive; you need to have clear
understanding of various styles of leadership to reach the correct Q.20) (e)
answer otherwise you can get confused among the remaining Explanation:
options. This is a straight question that is testing your conceptual clarity.
If you are aware of the definition of CRR and its usage, this
Q.16) (a) question is a sure shot for you.
Explanation: CRR is a specified minimum fraction of the total deposits of
customers, which commercial banks have to hold as reserves
This question was asked from the management section of the either in cash or as deposits with the central bank. RBI JUST
syllabus. This is an approachable question if you have studied the DON’T PAY ANY INTEREST on CRR.
topic of morale and motivation while covering the management Again, we cannot let these questions slip out of our hands. These
section. questions are opportunities and not threats. Make sure that you
As you know, morale is a positive group phenomenon then how are not leaving out conceptual questions.
can options (b) and (c) be the answer as both of these are showing
negativity. Q.21) (c)
With high morale, you can enjoy your work, but this doesn’t Explanation:
mean that you start having entertainment at the workplace. So,
you can eliminate option (d) as well. This question was asked from the Finance Section of the syllabus.
With high morale, you can become efficient and do your work This is a second question on the topic of NBFC. So, the takeaway
effectively but high morale does not give you a guarantee of from these questions is, that you should prepare the topic of
having a lot of money. Hence, you can eliminate option (e). NBFC in full detail as important topics are asked again and again
Now, you are left with the answer that is option (a). in the exam.
This is an easy question if you have studied the features of NBFC.
Q.17) (c) It’s difficult if you are a procrastinator or a student running after
Explanation: everything under the sun but not covering what’s relevant.
NBFC always remains in news, hence you can’t say that this
This question has been asked from the management section question is not doable.
of the syllabus. This is a conceptual question wherein options
are confusing and with close meanings. However, the question Q.22) (a)
could be answered if you focus on key words ‘integrating men, Explanation:
material, machine’.
This question was asked from the Finance section of the syllabus.
Q.18) (d) You can use elimination skills in this question.
Explanation: The term “equity” is used with shares, so it makes no sense with
gold receipts. Hence, you can eliminate option (b) and option (e).
This question has been asked from the management section of the Terms used in options (c) and (d) don’t even exist in respect of
syllabus. This is again a conceptual question which requires good gold receipts. Hence, you can eliminate these.
understanding about the communication process. The keywords Now, you must have noticed that the present government is
in the question are ‘uses’ and ‘according to audience’ which can emphasizing a lot on getting things digitalized. So, you can also
help you reach to the correct answer. make a guess in this option regarding electronic gold receipts.

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Q.23) (c)
Explanation: This question was asked from the finance section of the syllabus.
Although it is a factual question but you can do this if you have
No scheme of the angel fund shall have more than two hundred studied open ended schemes.
angel investors. You can directly eliminate option (a), (d), and (e) because they do
not have any lock-in period, whereas small cap fund has a lock-
Q.24) (a) in period of less than 1 year. So, you can eliminate option (b) as
Explanation: well. Now, you are left with ELSS and it is the answer.

This question was asked from the finance section of the syllabus.
You can solve this question by using common sense and
elimination skills.
Costing
You can easily eliminate option (d) and (e) because calling an
option European or American just on the basis of increase in Q.28) (a)
strike price makes no sense. Explanation:
Similarly, there is nothing like “at the money option”. So, you
can eliminate option (c) as well. This question was asked from the Costing section of the syllabus.
Now, in the question it is written that the strike price is more Examiner has framed this question to check your concepts. The
than market price so, how can it be “in the money”. So, you can Lean system is very clearly mentioned in your syllabus. So, it is
eliminate option (b) as well. your moral duty to study this topic in detail.
Now, you are left with option (a) only and it also makes sense. All the options from (b) to (e) are part of the lean system. In
option (a) examiner has used the opposite of pull, just to make
Q.25) (c) the option wrong. Please be very careful whenever you encounter
Explanation: opposite words in options as there are high chances of that option
being wrong.
This question was asked from the finance Section of the syllabus.
You can use common sense and elimination skills to solve this Q.29) (a)
question. Explanation:
Options (a) and (b) are incomplete because they are not specifying
the condition of increase or decrease in the value of derivative. This question was asked from the Costing section of the syllabus.
Hence, you can eliminate these. Again, there is use of the word NOT in the question and option.
Option (e) is a bit extreme because there is use of the word So, extra attention is needed while interpreting the question and
“always”. Whenever examiner uses words like “always, never, marking the right answer.
only” in any statement, then you should give double attention to This is a conceptual question that also checks your memory.
that statement because the chances of that statement being wrong Examiner not only checks your concepts through such questions
is ALWAYS HIGH. The intention of examiner behind framing but also checks whether you can keep certain facts regarding the
such statements is to eliminate extreme thinkers from the merit topic in mind or not.
list. All the options other than (a) are features of budgetary control.
Option (d) is incorrect as the value of derivative does not remain And if you don’t read option (a) with focus then you might miss
constant in fact it fluctuates with the underlying market price or the word, NOT, and option (a) will also appear correct.
asset.
Q.30) (b)
Q.26) (e) Explanation:
Explanation:
This question was asked from the Costing section of the syllabus.
This question was asked from the finance section of the syllabus. Total Productive Maintenance is a separate topic under costing
Although it is an easy question as you can solve it on the basis of under which there are eight pillars that focus on proactive and
general awareness but there is a little scope of confusion as well. TMP is used to eliminate breakdown maintenance Hence , it
All the options from (a) to (d) are given with their regulatory cannot be included under TPM.
bodies but option (e) is confusing in nature because AMFI is also
linked with mutual funds as it is a nodal association of mutual Q.31) (b)
funds across India BUT it doesn’t regulate mutual funds. SEBI Explanation:
is the regulatory body of Mutual Funds. Hence, the answer is (e)
because you have to find the incorrect option. This question was asked from the Costing section of the syllabus.
This is a straight factual question. If you know the full form of
Q.27) (c) DMAIC, then you will mark this option right without taking any
Explanation: anytime otherwise if you approached this question then it can kill

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your time. material and indirect material while doing Microeconomics in

In such an “acronym” type of questions, you should try to class 11th.
understand the mechanism behind the full form. This helps in If you just know the raw meaning of direct material then you can
memorizing not only the full form but also the sequence and do this question right. Direct materials are those materials that are
order of the acronym. core to the production process and can be directly traced to the
Like, in DMAIC you can understand the chain process. specific product manufactured. Options from (a) to (c) and option
For example, only after defining something you can measure it, (e) fits into our definition of direct material. From here, you can
only after measuring you can analyze it, after analysing you can conclude that option (d) is your answer.
improve it, and afterward you can CONTROL it. Here, the word
Correct just does not fit in.

Q.32) (e)
Companies Act
Explanation:
Q.36) (b)
This question was asked from the Costing section of the syllabus. Explanation:
Again, you have to find the incorrect statement from the given
options. So, based on the questions discussed above, you can This question was asked from the Companies Act. This is again a
conclude that questions in your exam will not be direct, there will factual question and you can expect more factual questions from
be twists and turns in the questions. the Companies Act.
Here, from options (a) to (d), the examiner has given you the You can apply some tricks for remembering the tenure of various
features of the Kanban system. But in option (e) he has used the dignitaries. The term of five years is the most common one as five
opposite of “explicit” i.e., “implicit” just to puzzle you. years is the tenure of Lok Sabha, president, and others. So, you
can club the dignitaries having the same tenure in one group and
Q.33) (a) this will definitely help you in the exam.
Explanation:
Q.37) (d)
This question was asked from the Lean System under Costing Explanation:
Section of the syllabus.
Lean System and Innovation is given in detail in your syllabus. Again, this is a factual question from the Companies Act. Yes,
Hence, you should do this topic from the heart. Examiner has there will be many facts that you have to memorize. It’s a harsh
kept the techniques of the lean system in all the options. If you reality of government exams like SEBI that you must accept.
know techniques of the lean system then you can mark the right Just remember, the examiner wants to check your factual memory
option otherwise you can make mistake. through fact-based questions. Thus, practice them without
Through this question, you can observe that examiner is interested questioning his intentions. Criticism of the examiner will not take
in checking your in-depth knowledge regarding a particular It will take you to the finish line of SEBI examination.
topic. So, you should make a point to study each and every topic
mentioned in the syllabus in length and breadth because you never Q.38) (b)
know from which topic the examiner will frame the questions. Explanation:
This question was asked from the Companies Act. Again, this is a
Q.34) (a) factual question. From the above analysis, you can realise that if
Explanation: you really want to clear this exam then you just can’t even think
of skipping the facts that come your way.
Here, you got the second question from Lean System in a row. According to Section 27 of the Companies Act, A company shall
Thus, you can realise how much important the topic of Lean not vary the terms of the contract referred to in the prospectus
System is. And again, there is use of the word, “NOT” in the except by general meeting by way of special resolution.
question. So, please focus on the terminology in the examination. In this question, options are framed in an order to make you
There are 5 steps in this methodology: Sort, Set in order, Shine, feel uncomfortable in the exam. Students who have read the
Standardize, and Sustain. If you try to understand the order of this Companies Act in detail can do this question right else there are
sequence then you will not need to mug up all 5S mentioned here. high chances of marking this question wrong.
Creating a short story and mnemonics help in memorizing such
sequence-based questions. Q.39) (e)
Explanation:
Q.35) (d)
Explanation: This question was asked from the Companies Act. Once again,
it is a factual question from the Companies Act. You need
This question was asked from the Costing section of the syllabus. to go through all the key concepts of the Companies Act to
But you must have studied about two types of material i.e., direct solve questions from this section of the syllabus. There will

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be approximately 9 questions from the Companies Act in your expected to know. The fact is not even unimportant.
exam. So, please prepare this topic seriously for your exam if you
want to clear it.
In this question, the options are very close and confusing.
Examiner often plays with digits while making your question
Economics
paper. You need to be wide awake to catch such tricks of the
examiner. Q.44) (a)
Explanation:
Q.40) (c)
Explanation: This question was asked from the economics section of the
syllabus. Cost and its various types are taught to students in class
This question was asked from the Companies Act. Although it is 12th. So, you can see the level of this question is not much.
a factual question but an easy one. Yes, if you have not studied In the question, you are given definition of “Cost” that is of no
the conditions of residence anywhere, then it might become a use to you as you are asked about imputed cost only. Examiner
tough question for you. gives such extra information to waste your time.
During graduation, you are taught to consider a stay of 182 days You cannot use guesswork in this question as you need to have
to calculate the residential days of a taxpayer in India. So, if you conceptual understanding of various types of costs to solve this
can recall even this knowledge on your exam day, then also you question. Blind guessing will fetch you negative marks.
can mark option (c) as the answer.
Q.45) (a)
Q.41) (a) Explanation:
Explanation:
This question was asked from the economics section of the
This question was asked from the Companies Act. We are syllabus. The formula and concept of GDP and GNP are a part of
noticing again and again that questions from the Companies Act the macroeconomics of class 12th.
are factual in nature. So, the only panacea for factual questions is You should prepare the topic of national income very well as it
reading the factual topics again and again so that all the facts can not only remains in news but it is also expected from aspirants to
get registered in your mind. have a basic understanding of national income.
Section 47 of the Companies Act 2013 relates to the voting rights Examiner has given so much time in framing options of this
of shareholders in a company. The voting right on a poll available question hence there is so much scope of negative marking in this
to equity shareholders will be in the percentage of his share in the question. Touch this question only when you know the formula
paid-up equity share capital associated with the company. So, the otherwise you will lose marks because of this question.
answer is (a).
Q.46) (a)
Q.42) (e) Explanation:
Explanation:
This question was asked from the economics section of the
This question was asked from the Companies Act. It is not syllabus. Again, different types of markets are taught to students
surprising to see the factual question again as we have already in class 12th. So, you can see the questions asked from the
analyzed the trend of questions from the Companies Act. economics section are very basic.
No logic, no elimination skills can help you in such kinds of If you just know the basic definition and features of oligopoly
questions. These questions come under the category of “Do or then you can use logic to solve this question.
Die”. If you know the answer then it’s good enough if you don’t Logic 1: Cartel is a formal agreement among firms in an
know the answer you just can’t do guesswork here. If you lack oligopolistic industry. There is cooperation among firms that are
clarity in such types of factual questions then you should leave part of the cartel. Hence, you can use this information to eliminate
such questions to avoid negative marking and save time. option (b).
Logic 2: In perfect competition, there are so many buyers and
Q.43) (b) sellers. Hence, it is more competitive than Oligopoly. Option (c)
Explanation: eliminated.
Logic 3: There are limited firms in Oligopoly and that is why
This is the last question from the Companies Act, it comes they have a lot of control over the price of commodities. Option
directly under the factual type of questions where the objective is (d) eliminated.
to check your memory. We tend to under-rate such questions but Logic 4: Free entry and exit is a feature of perfect competition,
for the examiner, judging your memory and retentions forms an not oligopoly. Hence, option (e) is eliminated.
important part of the overall analysis of the student’s capability Now, you are left with option (a) only and it is the answer.
to be a good officer.
In short, it’s a simple expected question that a SEBI student is Q.47) (e)

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Explanation: Logic 2: The current account tracks actual transactions, such as

import and export of goods, whereas capital account tracks the
This question was asked from the economics section of the net balance of international investments. So, how can they have
syllabus. LM curve is taught to students during graduation. same items? Hence, you can eliminate option (c).
So, you can see that examiner has tried to increase the level of Logic 3: International flow of money and products can also cause
question here. surplus or deficit. So, how can it help in balancing? So, you can
You just can’t apply any type of trick or guesswork in this eliminate option (d) as well.
question as this is a conceptual question. The examiner is always Logic 4: The statement in option (e) is extreme because there
focused on checking your conceptual clarity. Majority questions is use of the word ‘ALWAYS’ in it. I have told you earlier as
that you see in the exam are targeted at differentiating an average well that statements with extreme words have a high tendency of
or poor student from an excellent student. You need to be amongst being wrong.
excellent students but for it to happen, your concepts have to be And in this question option (e) is also contradictory to the fact
crystal clear. being asked in the question. Hence, option (e) will also get
eliminated.
Q.48) (b) Now, you are left with option (b) only and it is the answer.
Explanation:

This question was asked from the economics section of the

syllabus. It is a numerical question based on concepts. If you
know, for creating a situation of equilibrium demand should be
equal to supply then you can solve this numerical easily.
Demand = Supply
12 – p = -3 + 4p
5p = 15
p=3
Putting p = 3 in S = -3+4p
q=9

Q.49) (e)
Explanation:

This question was asked from the economics section of the

syllabus. The elasticity of demand and supply is part of the
microeconomics of class 12th. So, you can see the examiner has
again started asking questions from class 12th syllabus for making
a balanced paper.
This is a conceptual question but it checks your level of
understanding. I would say that it is the duty of examiner to ask
such questions where the concepts of students are checked.
If the producer is bearing the tax burden, then he will take out
the amount of taxes paid by him through the public. So, the
demand will fluctuate inversely to the taxes being imposed on the
producer. Hence, the demand of goods will be elastic and supply
would be inelastic.

Q.50) (b)
Explanation:

This question was asked from the economics section of the

syllabus. Balance of Payment is a part of the macroeconomics of
class 12th. You can use elimination skills and logic to solve this
question.
Logic 1: Imports are usually not equal to exports. It is quite
difficult to have imports and exports in a balanced state. Countries
like India import more and export less, whereas countries like
China export more and import less. Hence, you can eliminate
option (a).

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