100+ Free CMA Inter Paper 5: Business Laws and Ethics Practice Questions

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2026 Statistics

Key Facts: CMA Inter Paper 5: Business Laws and Ethics Exam

100

Total Marks

ICMAI CMA Syllabus 2022

3 hrs

Exam Duration

ICMAI

40%

Corporate Laws Weight

ICMAI Paper 5 Syllabus

30%

Commercial Laws Weight

ICMAI Paper 5 Syllabus

Negative Marking

ICMAI Exam Pattern

Group I

CMA Intermediate

ICMAI

CMA Inter Paper 5 (Business Laws and Ethics) is a 100-mark, 3-hour offline Group I paper under the ICMAI 2022 syllabus with no negative marking. Section weights are Commercial Laws 30%, Industrial Laws 15%, Corporate Laws (Companies Act 2013) 40% and Business Ethics 15%, so the Companies Act is the most heavily examined area. The real paper is part-objective (30 marks) and part-descriptive (70 marks); ICMAI also publishes an official MCQ Bank, so this 100-question set is structured purely as MCQ knowledge prep weighted to the official syllabus.

Sample CMA Inter Paper 5: Business Laws and Ethics Practice Questions

Try these sample questions to test your CMA Inter Paper 5: Business Laws and Ethics exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Under Section 10 of the Indian Contract Act, 1872, which one of the following is NOT an essential element required to make an agreement a valid contract?

A.Free consent of the parties

B.Lawful consideration and lawful object

C.The agreement must be in writing and registered in every case

D.Competency of the parties to contract

Explanation: Section 10 requires free consent, competent parties, lawful consideration, lawful object and that the agreement is not expressly declared void. It does NOT require every contract to be written and registered; oral contracts are generally valid unless a specific statute mandates writing or registration.

2An offer that is communicated through an advertisement promising a reward to anyone who performs a specified act is best classified under the Indian Contract Act, 1872 as a:

A.Specific offer

B.Counter offer

C.General offer

D.Cross offer

Explanation: A general offer is made to the world at large and any person who fulfils the stated conditions can accept it by performance, as recognised in Carlill v. Carbolic Smoke Ball Co. and applied in Indian law. Performance of the conditions amounts to acceptance.

3Under Section 7 of the Indian Contract Act, 1872, to convert a proposal into a promise the acceptance must be:

A.Absolute and unqualified

B.Conditional upon further negotiation

C.Communicated only after performance is complete

D.Made by silence of the offeree

Explanation: Section 7 provides that acceptance must be absolute and unqualified and must be expressed in some usual and reasonable manner. A qualified or conditional acceptance operates as a counter offer and does not conclude the contract.

4A contract entered into by a minor under the Indian Contract Act, 1872, as settled in Mohori Bibee v. Dharmodas Ghose, is:

A.Voidable at the option of the minor

B.Void ab initio

C.Valid but unenforceable against the minor only

D.Enforceable once the minor attains majority

Explanation: An agreement with a minor is void ab initio because a minor is not competent to contract under Section 11. The Privy Council in Mohori Bibee held that such an agreement is wholly void from the beginning and cannot be ratified on attaining majority.

5Consideration that consists of an act or promise relating to the past, given before the promise was made, is treated under the Indian Contract Act, 1872 as:

A.Executory consideration

B.Unlawful consideration

C.Past consideration, which is valid in India

D.Inadequate consideration that is void

Explanation: Section 2(d) defines consideration to include an act done 'has done or abstained from doing', so past consideration is good consideration in India, unlike under English law. The act done at the promisor's desire before the promise supports the contract.

6Under Section 25 of the Indian Contract Act, 1872, an agreement made without consideration is valid when it is:

A.A promise to pay a time-barred debt made in writing and signed

B.An oral promise to make a gift in the future

C.A promise induced by undue influence

D.Any agreement between close relatives

Explanation: Section 25(3) makes a written and signed promise to pay a time-barred debt enforceable without fresh consideration. Other exceptions include natural love and affection between near relations in writing and registered, and compensation for past voluntary services.

7When consent to a contract is caused by coercion, fraud or misrepresentation under the Indian Contract Act, 1872, the contract is:

A.Void ab initio

B.Voidable at the option of the party whose consent was so caused

C.Valid and binding on both parties

D.Illegal and punishable

Explanation: Section 19 makes a contract voidable at the option of the party whose consent was obtained by coercion, fraud or misrepresentation. That party may choose to affirm or rescind the contract; it is not automatically void.

8A contract whose performance becomes impossible after it is made due to an event the parties could not prevent is discharged under the Indian Contract Act, 1872 by:

A.Novation

B.Supervening impossibility (frustration) under Section 56

C.Anticipatory breach

D.Remission under Section 63

Explanation: Section 56 provides that a contract to do an act which, after the contract is made, becomes impossible or unlawful by an event the promisor could not prevent, becomes void. This is the doctrine of supervening impossibility or frustration.

9The rule in Hadley v. Baxendale, recognised in Section 73 of the Indian Contract Act, 1872, limits damages for breach of contract to losses that:

A.Are remote and indirect

B.Arise naturally or were in the contemplation of the parties when contracting

C.Are punitive in nature

D.Always equal the full contract price

Explanation: Section 73 allows compensation for loss arising naturally in the usual course of things from the breach, or which the parties knew when making the contract to be likely to result. Remote and indirect losses are not recoverable.

10In a contract of indemnity under Section 124 of the Indian Contract Act, 1872, the person who promises to save the other from loss is called the:

A.Indemnity holder

B.Indemnifier

C.Surety

D.Principal debtor

Explanation: Under Section 124, the person who promises to make good the loss is the indemnifier (promisor), and the person whose loss is to be made good is the indemnity holder (promisee). A contract of indemnity protects one party against loss caused by the conduct of the promisor or any other person.

About the CMA Inter Paper 5: Business Laws and Ethics Exam

CMA Intermediate Paper 5, Business Laws and Ethics, is a Group I paper under the ICMAI 2022 syllabus carrying 100 marks. It covers Commercial Laws, Industrial Laws, Corporate Laws under the Companies Act 2013, and Business Ethics, examined offline in 3 hours.

Assessment

Question count not published by the exam provider

Time Limit

3 hours

Passing Score

40% in the paper and 50% aggregate in the group; no negative marking

Exam Fee

Approximately INR 1,200 per paper per term, within the CMA Intermediate course fee structure notified by ICMAI (The Institute of Cost Accountants of India (ICMAI))

CMA Inter Paper 5: Business Laws and Ethics Exam Content Outline

30%

Section A: Commercial Laws

Introduction to law and the Indian legal system, Indian Contract Act 1872, Sale of Goods Act 1930, Negotiable Instruments Act 1881, Indian Partnership Act 1932 and the LLP Act 2008.

15%

Section B: Industrial Laws

Factories Act 1948, Payment of Gratuity Act 1972, EPF & MP Act 1952, Employees' State Insurance Act 1948 and the Code on Wages 2019 covering employer compliance duties.

40%

Section C: Corporate Laws

Companies Act 2013: company types, incorporation, memorandum and articles, prospectus, share capital, directors, meetings, resolutions, auditors, dividend, CSR and NCLT.

15%

Section D: Business Ethics

Meaning and scope of business ethics, seven principles of public life, ethical theories, conflicts of interest, whistleblowing, CSR, ethics in finance and emotional intelligence.

How to Pass the CMA Inter Paper 5: Business Laws and Ethics Exam

What You Need to Know

Passing score: 40% in the paper and 50% aggregate in the group; no negative marking
Assessment: Question count not published by the exam provider
Time limit: 3 hours
Exam fee: Approximately INR 1,200 per paper per term, within the CMA Intermediate course fee structure notified by ICMAI

Keys to Passing

Work through all 100 available questions
Review every answer and explanation
Track weak areas and revisit them
Use our AI tutor for tough concepts

CMA Inter Paper 5: Business Laws and Ethics Study Tips from Top Performers

1Prioritise the Companies Act 2013 because Corporate Laws carry 40% of the marks, the single largest section.

2Memorise key thresholds and time limits such as quorum, notice periods, board meeting gaps, and gratuity eligibility, since the objective section tests them directly.

3Use the official ICMAI study material and MCQ Bank as your primary source and align every topic to the four sections.

4Practise stating sections and the relevant Act precisely, as the descriptive part rewards correct statutory references.

5Learn the seven principles of public life and Goleman's emotional intelligence components verbatim for quick ethics marks.

6Note there is no negative marking, so attempt every objective question and never leave any blank.

Frequently Asked Questions

What is the exam pattern of CMA Inter Paper 5?

Paper 5 (Business Laws and Ethics) is a 100-mark, 3-hour offline paper with no negative marking. Section A is a compulsory objective section worth 30 marks, and Section B is descriptive, where candidates answer 5 of 7 questions worth 14 marks each for 70 marks.

What are the section weightings of CMA Inter Paper 5?

Under the ICMAI 2022 syllabus, the section weightings are Commercial Laws 30%, Industrial Laws 15%, Corporate Laws (Companies Act 2013) 40%, and Business Ethics 15%, making the Companies Act the most heavily weighted area.

Is CMA Inter Paper 5 an MCQ exam?

No. The real exam is partly objective and partly descriptive. However, ICMAI publishes an official MCQ Bank for the paper, so MCQ practice such as this 100-question set is a valid and effective knowledge-prep method.

What is the passing criteria for CMA Inter Paper 5?

A candidate must score at least 40% in the paper and 50% in aggregate across the group to pass. Securing 60% or more in a paper earns a paper-wise exemption under ICMAI rules.

Which Acts are covered in CMA Inter Paper 5?

The paper covers the Indian Contract Act 1872, Sale of Goods Act 1930, Negotiable Instruments Act 1881, Partnership Act 1932, LLP Act 2008, Factories Act 1948, Gratuity Act, EPF and ESI Acts, the Code on Wages 2019, the Companies Act 2013, and business ethics topics.

How long is the CMA Inter Paper 5 exam?

The exam duration is 3 hours for 100 marks, conducted offline in pen-and-paper mode at ICMAI examination centres.

100+ Free CMA Inter Paper 5: Business Laws and Ethics Practice Questions

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