CA Inter Nov 2020 Question Paper with Solution PDF

The CA Intermediate November 2020 exam was crucial for students preparing for the Chartered Accountancy course. This article provides detailed questions and answers for all subjects covered in the exam, along with their solutions, aimed at helping students better understand the topics and prepare effectively for future exams.

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CA Inter Nov 2020 Question Paper with Solution

The CA Intermediate exam for November 2020 included various challenging questions across different subjects. Below are the questions and answers categorized by subject, designed to help students practice and understand key concepts better.

Subject: Accounting

Question:
What is the difference between capital and revenue expenditure?

Answer:
Capital expenditure refers to expenses that result in the acquisition or improvement of fixed assets, whereas revenue expenditure pertains to day-to-day operational costs.

Question:
Explain the concept of depreciation in accounting.

Answer:
Depreciation is the systematic allocation of the cost of a tangible fixed asset over its useful life.

Question:
What is the purpose of preparing a cash flow statement?

Answer:
The cash flow statement helps in analyzing the liquidity of a business by showing the inflow and outflow of cash during a specific period.

Question:
What are the different methods of calculating depreciation?

Answer:
The most common methods are the straight-line method and the reducing balance method.

Question:
What is the difference between a balance sheet and an income statement?

Answer:
A balance sheet shows the financial position of a company at a specific point in time, while an income statement shows the company’s performance over a period of time.

Question:
How do you account for a provision for doubtful debts?

Answer:
The provision for doubtful debts is created as an expense in the income statement and a liability in the balance sheet to account for potential losses in receivables.

Question:
What are contingent liabilities in accounting?

Answer:
Contingent liabilities are potential obligations that may arise based on the outcome of future events.

Question:
Explain the difference between accrual accounting and cash accounting.

Answer:
Accrual accounting recognizes revenue and expenses when they occur, while cash accounting records transactions only when cash changes hands.

Question:
What is the accounting treatment of goodwill?

Answer:
Goodwill is recorded as an intangible asset and is tested for impairment annually.

Question:
Explain the concept of the matching principle in accounting.

Answer:
The matching principle states that expenses should be recorded in the same period as the revenues they help generate.

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Subject: Law

Question:
What are the essential elements of a valid contract?

Answer:
A valid contract must have an offer, acceptance, mutual consent, a lawful object, and consideration.

Question:
Explain the concept of “bailment” under Indian Contract Act.

Answer:
Bailment is the delivery of goods by one party to another for a specific purpose, with the condition that the goods will be returned once the purpose is completed.

Question:
What is meant by the term “contract of sale” in law?

Answer:
A contract of sale involves the transfer of ownership of goods from the seller to the buyer for a price.

Question:
What is the difference between a contract of service and a contract for service?

Answer:
A contract of service involves an employer-employee relationship, while a contract for service involves an independent contractor providing services.

Question:
What is the concept of “unpaid seller” under the Sale of Goods Act?

Answer:
An unpaid seller is one who has not received the full payment for the goods sold, and has the right to retain possession or reclaim the goods in certain conditions.

Question:
What are the essential features of a negotiable instrument?

Answer:
A negotiable instrument must be in writing, transferable, and payable either on demand or at a fixed time.

Question:
Explain the term “quasi-contract” in law.

Answer:
A quasi-contract arises in situations where there is no formal agreement, but the law creates an obligation to prevent unjust enrichment.

Question:
What is the concept of “force majeure” in contracts?

Answer:
Force majeure refers to unforeseen events that prevent a party from fulfilling their contractual obligations, such as natural disasters or wars.

Question:
What is the role of the Consumer Protection Act?

Answer:
The Consumer Protection Act aims to safeguard the rights of consumers by providing a mechanism for the redressal of grievances related to defective goods and services.

Question:
Explain the concept of “capacity to contract” under the Indian Contract Act.

Answer:
A person must be of sound mind and of legal age to contract, and not disqualified by law from contracting.

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Subject: Taxation

Question:
What is the difference between direct and indirect taxes?

Answer:
Direct taxes are levied on income or wealth, such as income tax, while indirect taxes are levied on goods and services, such as GST.

Question:
Explain the concept of GST and its types.

Answer:
GST (Goods and Services Tax) is a single tax levied on the supply of goods and services, and it includes three main types: CGST, SGST, and IGST.

Question:
What is the threshold limit for GST registration for service providers?

Answer:
The threshold limit for GST registration for service providers is Rs. 20 lakhs (Rs. 10 lakhs for special category states).

Question:
Explain the term “capital gains tax.”

Answer:
Capital gains tax is a tax levied on the profit from the sale of an asset, such as property or stocks, that has appreciated in value.

Question:
What is the difference between long-term and short-term capital gains?

Answer:
Long-term capital gains are from assets held for more than a specified period (e.g., more than 36 months for property), while short-term capital gains are from assets held for a shorter period.

Question:
What is the tax treatment of dividends under Income Tax Act?

Answer:
Dividends are taxed in the hands of the shareholder after deducting the applicable tax at source (TDS).

Question:
What are the different heads of income under the Income Tax Act?

Answer:
The five heads of income are income from salary, income from house property, income from business or profession, capital gains, and income from other sources.

Question:
What is the tax deduction at source (TDS)?

Answer:
TDS is a mechanism by which a certain percentage of income is deducted at the source of payment, like salaries, interest, or commission.

Question:
What is the concept of “taxable income”?

Answer:
Taxable income is the income on which an individual or business is required to pay tax after deductions and exemptions.

Question:
What is the difference between tax planning and tax evasion?

Answer:
Tax planning is the legal arrangement of financial affairs to minimize tax liability, while tax evasion involves illegal practices to avoid paying taxes.

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Subject: Cost and Management Accounting

Question:
What is the importance of cost accounting in business?

Answer:
Cost accounting helps businesses determine the cost of products or services, enabling better pricing and cost control decisions.

Question:
Explain the difference between fixed and variable costs.

Answer:
Fixed costs remain constant regardless of production levels, while variable costs change in direct proportion to the volume of production.

Question:
What are overheads in cost accounting?

Answer:
Overheads are indirect costs that cannot be directly attributed to a specific product, such as rent, utilities, and administrative salaries.

Question:
What is break-even analysis?

Answer:
Break-even analysis helps determine the point at which total revenues equal total costs, resulting in neither profit nor loss.

Question:
What is activity-based costing (ABC)?

Answer:
Activity-based costing assigns costs to specific activities and products based on their use of resources, helping improve cost accuracy.

Question:
What is the contribution margin?

Answer:
The contribution margin is the difference between sales revenue and variable costs, which contributes towards covering fixed costs.

Question:
What is standard costing?

Answer:
Standard costing involves setting predetermined costs for products and comparing them to actual costs to evaluate performance.

Question:
What are the different types of costing methods?

Answer:
The main types of costing methods are job costing, process costing, and contract costing.

Question:
Explain the concept of margin of safety.

Answer:
The margin of safety represents the difference between the break-even point and actual sales, indicating how much sales can drop before a company starts incurring losses.

Question:
What is the significance of variance analysis?

Answer:
Variance analysis helps in assessing the difference between expected and actual performance, and helps in controlling costs and improving efficiency.

This collection of questions and answers serves as a detailed resource for CA Intermediate students to effectively prepare for their exams. The answers are designed to simplify complex concepts and provide practical insights into the key topics covered in the November 2020 exam, ensuring a deeper understanding and better exam readiness.