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CBSE Questions for Class 11 Commerce Business Studies Business Services Quiz 4 - MCQExams.com
CBSE
Class 11 Commerce Business Studies
Business Services
Quiz 4
State the following statement is True or False:
A document containing terms and conditions of insurance contract is called policy.
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0%
True
0%
False
Explanation
An insurance policy is a formal and legal document issued by the insurance company to the insured. It describes the terms and conditions relating to the particular policy.
It includes details about the risks covered, duration of coverage, amount of premium, mode of payment of premium, etc.
Hence, the following statement is true.
Joint Stock Company opens a saving account.
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0%
True
0%
False
Explanation
(i) Bank is a financial institution.
(ii) It helps a company. in solving the difficulties of money.
(iii) It also provides number of services to the Joint Stock Company.
(iv) Joint Stock Company mostly deals, with the Commercial Banks / Co-operative Bank.
(v) The company receives number of cheques, demand drafts to be encashed and also number of cheques for payment.
(vi) The Joint Stock Company takes help of banks for short term credit facilities and long term financial assistance.
(vii) For all this, it has to open a current account with the bank.
(viii) To encourage saving habit among people, a bank allows depositors to open saving account.
(ix) In such type of account, the depositor can withdraw money only two times in a week.
(x) Trading or business concerns, firms or Joint Stock Company should not open saving account.
State with reasons whether the following statements are True or False.
In cash credit, customers account is credited by a bank with the sanctioned amount.
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True
0%
False
Explanation
There is a limit fixed to the borrowing.
The interest on this facility is charged on the running balance and not on the borrowing limit. Under this arrangement, the borrower is allowed to withdraw up to a certain limit against security.
Hence, the following statement is true.
State with reasons whether the following statements are True or False.
Overdraft facility is granted to saving account holders.
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0%
True
0%
False
Explanation
(i) Overdraft is a short term loan facility in which the current account holder is permitted to draw more than what stands to his credit but upto overdraft limit sanctioned.
(ii) It is a temporary loan given for a short period.
(iii) It is as good as repaid when the amount is credited to current account.
(iv) Overdraft facility is given only to current account holders.
(v) The current account holder is allowed to over draw money in excess of the credit balance to his account.
(vi) For overdraft the requires to give security like goods, raw materials, shares, bonds or sometimes even personal guarantee of the customer.
(vii) Overdraft facility is not granted to saving account holders.
Board resolution is not required to open the current account with a bank.
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0%
True
0%
False
Explanation
A company has a separate legal entity. A company can carry on business in its own name, it can buy and sell assets in its own name, it can enter into a contract with outsiders in its own name, it can enter into a contract with outsiders in its own name. the company and its member are separate individuals
As a Company is a separate legal entity, the board resolution is required in addition to the other documents for opening a bank account.
A banking resolution allows a business to document the authorization by its members/board of directors to open a bank account.
Hence, the following statement is False.
No interest is paid by the bank in ______ account.
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0%
saving
0%
recurring deposit
0%
current
0%
All of above
Explanation
1.Savings account opened with a bank will earn the account-holder a percentage of interest as applicable to the account.
2.Recurring deposit account also attracts interest rate which is higher than what you get in a savings bank account.
3.Current account does not earn any interest on the money deposited. It is opened by businesses who have a higher number of transactions. There is no restriction on the number of times deposits or withdrawals that can be made.
Stop payment letter is usually made to prevent the misuse of the cheque when the cheque is _______.
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lost
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issued
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credit
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None of these
Explanation
Stop payment letter is usually made to prevent the misuse of the cheque when the cheque is lost. A customer who issued the cheque can write a stop payment letter. This stop payment letter is used to issue in order to stop the misuse of the lost cheque.
There is no restriction on the withdrawals from ________ account.
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0%
saving
0%
current
0%
cash credit
0%
over draft
Explanation
Current account is opened by a corporate entity. Unlike an individual, a corporate entity has numerous financial transactions that are routed through bank accounts. For the same reason, there is no limit of transactions in a current account.
Withdrawal limit for savings account, cash credit account, and overdraft account depends on the type of variant and other terms and conditions associated with the account.
Match the groups:
Group 'A'
Group 'B'
(1)
Lost cheque
(a)
Board of Directors
(2)
Fixed deposit account
(b)
Saving account
(3)
Cash credit
(c)
Investment
(4)
Appointment of bankers
(d)
Stop payment
(5)
Financial arrangement
(e)
Separate loan account
(f)
Higher rate of interest
(g)
Bank overdraft
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$$(1-d), (2-f), (3-e), (4-a), (5-g)$$
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$$(1-f), (2-d), (3-e), (4-a), (5-c)$$
0%
$$(1-c), (2-f), (3-a), (4-e), (5-g)$$
0%
$$(1-g), (2-f), (3-e), (4-c), (5-b)$$
Explanation
Stop payment request is made to the bank when a duly signed filled in cheque is lost.
Fixed deposit account earns a higher rate of interest compared to savings bank account.
A separate account is opened to avail cash credit.
Appointment of banker is made by the Board of Directors.
Bank overdraft is a kind of temporary financial arrangement.
_________ account is suitable for salaried people.
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0%
Current
0%
Saving
0%
Over draft
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None of these
Explanation
Salary Account opened with a bank is a form of savings account. It is generally as 'Zero balance' account. It encourages savings among salaried people.
Current account is opened by business entities who have numerous transactions.
Overdraft is a facility given by the bank to the account-holders (basically current account holders).
State the following statement is True or False:
The facility given by the bank to draw money over and above the actual account balance is called overdraft.
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True
0%
False
Explanation
Overdraft facility allows to withdraw cash or to issue cheques for the amount over and above the account balance. Usually overdraft facility is provided to current account-holders. It is a short term credit facility and carries an interest on the amount overdrawn, to be paid to the bank.
___________ is used for depositing cheque and cash into a bank account.
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Pay-in-slip
0%
Withdrawal slip
0%
Cheque
0%
Application
Explanation
Pay-in-slip is also called as a deposit slip. When a person deposits cheque or cash into a bank account, pay-in slip is filled in. It has the details viz account number, amount, date, etc. Depositor need not be account holder.
Withdrawal slip is used to withdraw money from an account with a bank. Signature of account holder is necessary to withdraw money.
Cheque is an instrument that is provided to an account holder to transact through his/her bank account. It is used to withdraw cash from account, and pay off debts.
Bank is a ________ institution.
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0%
financial
0%
social
0%
cultural
0%
all of above
Explanation
The bank is a financial institution. It accepts deposits from lenders and gives loans to the borrowers. Banks help to improve the financial stability of an economy.
Hence, option (A) is the correct answer.
State the following statement is True or False:
Pay-in-slip is commonly called as a deposit-slip.
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0%
True
0%
False
Explanation
Pay-in-slip is also called a deposit slip. When a person deposits cheque or cash into a bank account, pay-in=slip is filled in. It has the details viz account number, amount, date, etc. The depositor need not be an account holder.
Hence, the following statement is true.
Withdrawals are not permitted from the ________ accounts.
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0%
current
0%
saving
0%
fixed deposit
0%
cash credit
Explanation
Fixed Deposit account is opened for depositing money for a fixed period of time. Withdrawals are usually not permitted till the expiry of the deposit. However, premature withdrawal is allowed following the terms and conditions of the deposit availed.
Withdrawal of money is permitted from savings, current, and cash credit accounts.
State the following statement is True or False:
Request of secretary to the bank not to make the payment of cheque is known as stop payment.
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0%
True
0%
False
Explanation
This request is made in order to stop the payment of the cheque so that misuse of the cheque is prevented. This request is to be made by the customer who issued the cheque.
Hence, the following statement is true.
For an enterprise in service sector to come under the preview of micro enterprise the total investment in plant and machinery should not be more than __________.
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Rs. 25 lakhs
0%
Rs. 20 lakhs
0%
Rs. 50 lakhs
0%
Rs. 10 lakhs
Explanation
Micro, Small and Medium enterprises act, 2005 defines the micro, small and medium enterprises on the basis of the investment in the fixed assets. Hence, service sector enterprise to come under the preview of micro enterprise ,the total investment in plant and machinery should not be more than Rs. 10 lakhs.
Feature of email packages helps to ______.
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0%
Highlight
0%
Delete
0%
Attach
0%
Both a & b
Explanation
Feature of email packages helps to attach. Any computer based documents can be attached and sent along with the email via electronic transmission. One or more files can be attached with the email.
Electronic communication includes all of the following EXCEPT:
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Internet logs
0%
Telephone calls
0%
Video-conferencing
0%
E-mail
Explanation
Electronic communication includes all of the following, like internet logs, video-conferencing, E-mail, except telephone calls. Telephone calls take place through the telephonic network. It is not one of the modes of electronic communication.
FAX is an abbreviation of _________.
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Facsimile
0%
Faximile
0%
Faxisimile
0%
Faxsimilee
Explanation
FAX is an abbreviation of Facsimile. It is also known as telescoping or Teletext. FAX is generally defined as one of the modes through which telephonic transmission of printed material can be done. The telephone number is usually connected with any output device, like a printer.
Hence, option (A) is the correct answer.
Services can be touched and felt.
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0%
True
0%
False
Explanation
Services are intangible. They cannot be touched and felt. Inseparability is another characteristic of a service.
Which of the following can be treated as disadvantage of HUF form of business?
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A HUF business is not affected by the insolvency or death of any member including that of karta.
0%
An inefficient karta can do harm to the business.
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The continuity of business is always under threat. It may be due to a small rift within the family and if a co-parcener asks for a partition the business is closed.
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Since the karta has absolute freedom to manage the business, there is scope for him to misuse it for his personal gains.
Explanation
Despite having various advantages, the HUF form of business has disadvantages as well. One of them could be the misuse of power. Since Karta has absolute
freedom to manage the business, there is a scope for him to misuse it for his
personal gains. An inefficient Karta can do harm than good to the business.
Hence, option (B) is the correct answer.
The abbreviation "AAR' stands for ______________.
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Annual Average Risk
0%
Annual All Return
0%
Against All Risks
0%
Against Average Risk
Explanation
The abbreviation "AAR' stands for Against All Risk. AAR is related to insurance companies. AAR insurance is primarily referred to a health insurance company of Kenya that started its operations in the year of 1984.
Hence, option (C) is the correct answer.
The purpose(s) of business that goes beyond earning profits _____________.
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0%
An important institution in society
0%
For the supply of goods and services
0%
Creating job opportunities
0%
All of above
Explanation
Profit making itself shall not be the purpose of business entities. It is running in an environment where a business entity's responsibilities widen. It contributes to the growth of society. It supplies the required goods and services thereby catering to the needs of society. A business entity creates job opportunities for society. Thus, the purpose of a business entity has to be the growth of society by being a profitable enterprise in itself.
Hence, option (D) is the correct answer.
One who calculates insurance and annuity premium is known as _____.
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Investor
0%
Insurer
0%
Actuary
0%
Atheist
Explanation
One who calculate insurance and annuity premium is known as actuary. Actuary basically deals with management and measurement of risks and uncertainty. An actuary is often described as an business professional.
Banks helps to prepare _________.
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0%
credit report for company
0%
annual report over company
0%
status inquiry for company with which they are doing business
0%
all of the above
Explanation
Banks help to prepare status inquiry for company with which they are doing business. It helps the company to increase the performance of the organization. Status inquiry of the company helps to improve the credibility of the organization.
Businesses providing direct services like tailors, restaurants and professional services like doctors, lawyers are generally organized as _____________.
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Proprietary concern
0%
Trust
0%
Co-operative society
0%
Any of the above
Explanation
These businesses are usually run at a smaller scale and hence are organized as proprietary business firms.
Trust can be called a form of business wherein a trustee (an individual or a company) runs the business for the benefit of the beneficiaries.
A cooperative society is a voluntary association of persons, who join together with the motive of welfare of the members.
Hence, option (A) is the correct answer.
One word for a group of words "One who calculate insurance and annuity premium" is __________.
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actuary
0%
acrobat
0%
adulterate
0%
none of the above
Explanation
One word for a group of words "One who calculate insurance and annuity premium" is actuary. Actuary basically deals with management and measurement of risks and uncertainty. An actuary is often described as a business professional.
Process by which physical certificates of an investor are converted to an equivalent number of securities in an electronic format and credited in the Investors A/c held through depository participant is called __________.
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0%
Remat
0%
Demat
0%
both (A) and (B)
0%
only A
Explanation
Dematerialisation or Demat in short is the process through which an investors physical share certificate gets converted to electronic format which is maintained in an account with the Depository Participant.
A Joint HUF business ceases to exist on the death of the KARTA.
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0%
True
0%
False
0%
Partly true
0%
None of above
Explanation
On the death of the Karta, the Joint Hindu Family business continues to exist as the next senior-most family member becomes the Karta. However, a Joint Hindu Family business can be dissolved at any time either through mutual agreement between members or by partition.
Hence, the following statement is false.
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