NTA UGC NET/JRF Exam, June 2025 (Commerce)

Total Questions: 100

31. The cross price elasticity between two goods 'A' and 'B' is (-) 0.8. If the price of good 'B' rise by 20%, how will the demand for 'A' change?

Correct Answer: 1. 8.50%
Solution:Given: Cross Price Elasticity of Demand (Eₚ) between goods A and B = -0.8
Price Increase of Good B = +20%
Formula: %Change in Demand of A
= Cross Price Elasticity %Change in Price of B Substitute values:
%Change in Demand of A
= (-0.8) × 20 = -16%
A negative cross elasticity indicates that Goods
A and B are complementary goods. Hence, an increase in the price of Good B will lead to a decrease in the demand for Good A by 16%.

32. ABC Ltd. issued 2,000, 10% preference shares of ₹ 100 each at ₹95. Calculate the cost of preference shares.

Correct Answer: 2. 10.53%
Solution:

33. Match the LIST-I with LIST-II.

LIST-I (Item)LIST-II (Section)
A. Deduction in respect of medical insurance premiumI. Section 80CCH
B. Deduction in case of a person with disabilityII. Section 80D
C. Deduction in respect of interest on loan taken for higher educationIII. Section 80U
D. Deduction in respect of contribution to Agnipath SchemeIV. Section 80E

Choose the correct answer from the options given below:

Correct Answer: 3. A-II, B-III, C-IV, D-I
Solution:Matching deductions under various sections of Income Tax Act:
A. Medical Insurance Premium Deduction → Section 80D allows deduction for premium paid towards Mediclaim policies.
B. Deduction for Person with Disability→ Section 80U provides a flat deduction for individuals with disabilities.
C. Deduction for Interest on Education Loan → Section 80E covers deduction of interest on loans taken for higher education.
D. Contribution to Agnipath Scheme → Section 80CCH allows deductions for contributions to the Agnipath scheme.
Correct Matching: A-II (80D), B-III (80U), C-IV (80E), D-I (80CCH).

34. Arm's length price as per section 92F is the price applied or proposed to be applied when:

Correct Answer: 1. two unrelated persons enter into a transaction in uncontrolled conditions
Solution:The concept of Arm's Length Price under Section 92F of the Income Tax Act is pivotal in Transfer Pricing regulations. It ensures that transactions between associated enterprises (related parties) are priced fairly, as if they were conducted between independent (unrelated) entities under uncontrolled (market-driven) conditions.
The definition explicitly mentions that Arm's Length Price is the price which would have been applied between two unrelated persons in an uncontrolled situation. The purpose is to prevent tax evasion through manipulation of transaction prices between related entities.
Thus, though the context is about transactions between related parties, the Arm's Length Price benchmark is derived from how unrelated persons would transact in an open market.

35. Which of the following are the applications of the conservatism principle of accounting?

A. Valuation of stock in trade at the lower of cost or market value
B. Debiting drawings account and crediting purchases account when goods are withdrawn by the proprietor
C. Making provision for bad and doubtful debts
D. Making provision for discount on creditors
E. Creation of investment fluctuation fund
Choose the correct answer from the options given below:

Correct Answer: 4. A, C and E only
Solution:The Conservatism Principle (Prudence Concept) in accounting ensures that liabilities and losses are recognized as soon as they are foreseeable, while revenues and gains are only recorded when realized. Correct applications of Conservatism:
A. Stock Valuation at Lower of Cost or Market Value - Ensures that unrealized losses are accounted for, not unrealized gains.
C. Provision for Bad and Doubtful Debts - Anticipating potential non-recovery of debts, even if actual default hasn't occurred.
E. Creation of Investment Fluctuation Fund - Setting aside reserves to absorb potential future investment losses.
B. (Drawings adjustment) and D. (Provision for discount on creditors) are not applications of conservatism.

36. Which of the following methods belong to the category of demand/market-based pricing?

A. Surge pricing
B. Premium pricing
C. 'What the traffic can bear' pricing
D. Discount pricing
E. Parity pricing
Choose the correct answer from the options given below:

Correct Answer: 3. A, B and C only
Solution:Demand/Market-Based Pricing methods focus on consumer demand and market conditions rather than cost structures.
A. Surge Pricing - Prices fluctuate based on real-time demand.
B. Premium Pricing - Setting a high price to create a perception of superior quality.
C. 'What the Traffic Can Bear' Pricing - Charging the maximum price that customers are willing to pay. All three are classic demand-based pricing strategies.
D. Discount Pricing - Though influenced by market factors, it's generally seen as a tactical cost-based strategy.
E. Parity Pricing - Involves setting prices based on competitors, categorized under competition-based pricing.
Thus, correct methods: A, B, С.

37. A term loan becomes Non-Performing Asset (NPA) if its interest and/or instalment of principal remains overdue for a period of more than:

Correct Answer: 4. 90 days
Solution:As per RBI guidelines, a Term Loan is classified as a Non-Performing Asset (NPA) if the principal or interest remains overdue for more than 90 days. This 90-day norm is applicable for all banks and financial institutions to identify loan defaults.

38. The scheme of partial integration of tax or non-agricultural income with income derived from agricultural is applicable if an individual has:

Correct Answer: 4. Non-Agricultural income of more than the exemption limit and agricultural income exceeding5000
Solution:Under the Partial Integration Scheme of Agricultural and Non-Agricultural Income in India:
• Non-Agricultural Income must exceed the exemption limit applicable to the individual.
• Agricultural Income must exceed 5,000 for the partial integration provisions to apply. Thus, the correct condition is when NonAgricultural Income exceeds the exemption limit and Agricultural Income exceeds5,000.

39. Which of the following are the key objectives of WTO?

A. To set rules for international trade
B. To resolve trade disputes
C. To resolve border disputes
D. To provide a forum for negotiating trade liberalisation
Choose the correct answer from the options given below:

Correct Answer: 1. A, B, D only
Solution:Key Objectives of World Trade Organization (WTO):
A. To set rules for international trade - WTO formulates trade agreements and rules.
B. To resolve trade disputes - WTO has a formal mechanism for resolving disputes between nations.
C. To resolve border disputes - Incorrect, WTO doesn't handle geopolitical/border disputes.
D. To provide a forum for negotiating trade liberalisation - Core WTO function is trade negotiations to lower trade barriers.
Thus, correct objectives are A, B, D.

40. In India, the term of every utility patent granted shall be of ........ years.

Correct Answer: 2. 20
Solution:In India, the term of every utility patent (which is a regular patent for inventions) is 20 years from the date of filing of the patent application, as per The Patents Act, 1970 (as amended in 2005).