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CBSE Questions for Class 11 Commerce Business Studies Forms Of Business Organisation Quiz 11 - MCQExams.com
CBSE
Class 11 Commerce Business Studies
Forms Of Business Organisation
Quiz 11
Which of the following can be treated as advantages 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.
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An inefficient karta can also 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 aco- 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
A HUF business is not affected by the insolvency or death of any member including that of karta- this can be treated s advantage of HUF form of business. In a Hindu Undivided Family business only the male members get a share in the business by virtue of their being part of the family. A Hindu Undivided Family is an extended family arrangement prevalent among Hindus of the Indian subcontinent. It came into existence as per Hindu Inheritance Laws of India.
Which of the following can be treated as advantage of HUF from of business?
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Every co-parcener is assured a share in the profits irrespective of his contribution to the profits irrespective of his contribution to the successful running of the business.
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The karta enjoys full freedom in conducting the family business.
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A HUF business provides opportunity for the young members of the family to get the benefit of knowledge and experience of the elder members and also helps in inculcating virtues like discipline, self-sacrifice, tolerance etc.
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All of above
Explanation
In a Hindu Undivided Family business only the male members get a share in the business by virtue of their being part of the family. A Hindu Undivided Family is an extended family arrangement prevalent among Hindus of the Indian subcontinent. It came into existence as per Hindu Inheritance Laws of India. Following can be treated as advantage of HUF form of business:
a) Every co-parcener is assured a share in the profits irrespective of his contribution to the profits irrespective of his contribution to the successful running of the business.
b) The karta enjoys full freedom in conducting the family business.
c) A HUF business provides opportunity for the young members of the family to get the benefit of knowledge and experience of the elder members and also helps in inculcating virtues like discipline, self-sacrifice, tolerance etc.
Which of the following can be treated as disadvantages of HUF form of business?
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An inefficient karta can also do harm to the business.
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In a HUF business the male members of three successive generations are involved which may leads to conflict between generations.
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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 coparcener asks for a partition the business is closed.
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All of above
Explanation
In a Hindu Undivided Family business only the male members get a share in the business by virtue of their being part of the family. A Hindu Undivided Family is an extended family arrangement prevalent among Hindus of the Indian subcontinent. It came into existence as per Hindu Inheritance Laws of India. Following can be treated as disadvantage of HUF form of business:
a) An inefficient karta can also do harm to the business.
b) In a HUF business the male members of three successive generations are involved which may leads to conflict between generations.
c) The continuity of business is always under threat. It may be due to a small rift within the family and if a coparcener asks for a partition the business is closed.
A company can hold its first AGM within ______ months from date of its incorporation.
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12
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15
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9
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None of these
Explanation
A company can hold its first AGM within 9 months from date of its incorporation. Annual General Meeting can be hold by the directors of the company. First Annual General Meeting should be held by the directors of the company within the 9 months from the date of its incorporation.
Which of the following can be treated as disadvantages of HUF form of business?
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HUF business has generally limited financial and managerial resource.
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There is always a lack of motivation among the members to work hard.gains.
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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.
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All of above
Explanation
In a Hindu Undivided Family business only the male members get a share in the business by virtue of their being part of the family. A Hindu Undivided Family is an extended family arrangement prevalent among Hindus of the Indian subcontinent. It came into existence as per Hindu Inheritance Laws of India. Following can be treated as disadvantage of HUF form of business:
a) HUF business has generally limited financial and managerial resource.
b) There is always a lack of motivation among the members to work hard.gains.
c) Since the karta has absolute freedom to manage the business, there is scope for him to misuse it for his personal gains.
Partnership is an association of two or more individuals (but not more than 20) who agree to share the profits of a lawful business which is managed and carried on __________________.
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By all
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By any of them.
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By some of them acting for all
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(a) or (b) or (c)
Explanation
Partnership is an association of 2 or more individuals but not more than 20 who agree to share the profits of a
lawful business which is managed and carried on either by all or by any, or some of them acting for all. Partnership can be defined as a type of unincorporated business organization in which multiple individuals, called general partners, manage the business and are equally liable for its debts' other individuals called limited partners may invest but not be directly involved in management and are liable only to the extent of their investments.
____ is an association of 2 or more individuals but not more than 20 who agree to share the profits of a
lawful business which is managed and carried on either by all or by any, or some of them acting for all.
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HUF
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Partnership
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Company
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Trust
Explanation
Partnership is an association of 2 or more individuals but not more than 20 who agree to share the profits of a
lawful business which is managed and carried on either by all or by any, or some of them acting for all. Partnership can be defined as a type of unincorporated business organization in which multiple individuals, called general partners, manage the business and are equally liable for its debts' other individuals called limited partners may invest but not be directly involved in management and are liable only to the extent of their investments.
A joint HUF business ceases to exist on the death of the KARTA.
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True
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False
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Partly true
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None of above
Explanation
A joint HUF business ceases to exist on the death of the KARTA- this is a true statement. The affairs of business are managed by the head of the family, who is known as the Karta. In the entire Hindu joint family, the karta occupies a very important position. Karta is the eldest member of the family. Only a coparcener can become Karta.
Which of the following can be treated as advantage of HUF form of business?
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The liability of the co-parceners is limited, except for that of karta which makes the karta to manage the business in the most efficient manner.
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A HUF business is not affected by the insolvency or death of any member including that of karta.
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Both (a) and [b)
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(a)or(b)
Explanation
In a Hindu Undivided Family business only the male members get a share in the business by virtue of their being part of the family. A Hindu Undivided Family is an extended family arrangement prevalent among Hindus of the Indian subcontinent. It came into existence as per Hindu Inheritance Laws of India. Following can be treated as advantage of HUF form of business:
a) The liability of the co-parceners is limited, except for that of karta which makes the karta to manage the business in the most efficient manner.
b) A HUF business is not affected by the insolvency or death of any member including that of karta.
A partner may retire from an existing firm __________________.
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With consent of all partners
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As per express agreement
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By written notice in partnership at win
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All of the above
Explanation
Every partner is an agent of the partnership firm. Individuals have to enter into a contract to become partners. A partner may retire from an existing firm:
a) With the consent of all partners
b) As per the express agreement
c) By written notice in partnership at the win.
Hence, D is the correct option.
What is a Partnership?
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An agreement between persons
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An association of person
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A body of individuals
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All of the above
Explanation
A partnership is an agreement between persons. The partnership is an association of 2 or more individuals but not more than 20 who agree to share the profits of a
lawful business which is managed and carried on either by all or by any, or some of them acting for all.
A partnership can be defined as a type of unincorporated business organization in which multiple individuals, called general partners, manage the business and are equally liable for its debts' other individuals called limited partners may invest but not be directly involved in the management and are liable only to the extent of their investments.
Hence, A is the correct option.
If profit sharing ratio is not specified in the partnership deed, then the profit is shared ________________.
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Equally
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According to the seniority of partners
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According to the capital contribution
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According to qualification.
Explanation
If the profit sharing ratio is not specified in the partnership deed, then the profit is shared equally. The partners can share profit in any ratio. But in the absence of an agreement, they share profits equally.
Hence, A is the correct option.
Every partner is bound to attend ______ to his duties in the conduct of the business.
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Systematically
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Diligently
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Sincerely
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Effectively
Explanation
Every partner is bound to attend diligently to his duties in the conduct of the business. Every partner is an agent of the partnership firm. Individuals have to enter into a contract to become partners. The business in the partnership firm can be carried on by all the partners or any one of them acting for all.
Hence, B is the correct option.
Which of the following is a non-trading association?
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Company
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Partnership firm
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Club
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HUF
Explanation
Non
-
Trading Organizations
. A business concern is an
organization
involved in activities of buying or selling goods and services with a view of making a profit. There are associations, clubs or societies which are not formed for the purpose of making profit. These are called
non
-
trading organizations
..
Interest on capital will be allowed only when _________________.
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There are heavy losses in the firm
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There are no profits and no losses
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There are profits
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Always
Explanation
Interest on capital will be allowed only when there are profits. Interest on capital is only given to partners when there are profits. In case of losses, partners are not given interest on capital. Interest on capital can be defined as the amount charged as interest on partner's capital.
True test of partnership is ______________.
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Share of profits only
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Share of profits & losses
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Mutual agency
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None of these
Explanation
True test of partnership is mutual agency. Partnership is an association of 2 or more individuals but not more than 20 who agree to share the profits of a
lawful business which is managed and carried on either by all or by any, or some of them acting for all. Partnership can be defined as a type of unincorporated business organization in which multiple individuals, called general partners, manage the business and are equally liable for its debts' other individuals called limited partners may invest but not be directly involved in management and are liable only to the extent of their investments.
Which of the following statement is correct?
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Partners are the agents of the firm but member of company are not its agents
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Partner cannot contract with his firm but a member of a company can
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Both (a) and (b)
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None of these is correct
Explanation
Persons who have entered into a partnership with one another are called individually "partners". Following statements are correct:
a) Partners are the agents of the firm but member of company are not its agents
b) Partner cannot contract with his firm but a member of a company can.
A new partner can be admitted in the firm with the consent of ___________________.
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Unanimous consent of all the partners
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Consent of the majority of the partners
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Special majority of partners
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New partner only
Explanation
A new partner can be admitted in the firm with the consent of unanimous consent of all the partners. Admission of partner in the partnership firm and the share of the new partner is decided with the consent of the existing partners of the partnership entity. Every partner is an agent of the partnership firm.
Company's corporate personality was brought forward in the case of ___________________.
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Macaura V. Northan Assurance Co. Ltd
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Jons V. Lipman
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CIT V. Meenakshi Mills Ltd.
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Salomon V Salomon and Co. Ltd.
Explanation
Salomon
v
Salomon
& Co Ltd [1897] AC 22 (law cite link) was the case that got me interested in corporate law. The
principle
from the case is very simple - a company is a separate legal entity and thus a juristic "person" in the eyes of the law.
Piercing the
corporate veil
refers to a situation in which courts put aside limited liability and hold a
corporation's
shareholders or directors personally liable for the corporation's
actions or debts.
Veil
piercing is most common in close corporations
.
To bind the firm under implied authority, the act must be done in the _____________.
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Routine Way
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Regular Way
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Extra-ordinary Way
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Usual Way
Explanation
To bind the firm under implied authority, the act must be done in the usual way. Implied authority can be referred to an agent with the jurisdiction to perform acts which are reasonably necessary to accomplish the purpose of an organization. Under contract law, implied authority figures have the ability to make a legally binding contract on behalf of another person or company.
The name of a company can be changed by
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An ordinary resolution
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A special resolution
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The approval of the union government
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A special resolution and with the approval of the union government
Explanation
Option D is the correct answer.
What is the maximum number of partners permissible for a firm carrying on general business?
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$$7$$
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$$10$$
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$$20$$
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$$50$$
Explanation
Option C is the correct answer.
The ______ defines the scope of a company's activities.
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Prospectus
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Statutory declaration
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Memorandum of association
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Articles of association
Explanation
Option C is the correct answer.
How may a partnership come into existence?
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By inheritance of property
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By the operation of law
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By an expressed agreement only
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By an expressed or implied agreement
Explanation
Option D is the correct answer.
____________ are preferred when one needs to convey information in writing.
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Office Order
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Office Circular
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Office Note
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Memorandum
Explanation
Option D is the correct answer.
Memorandum
are preferred when one needs to convey information in writing.
The liability of sole proprietor is
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Limited to the extent of his capital invested
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Limited to the extent of the value of his business assets
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Limited to the extent of the value of his business assets and all his private estates
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Limited to the extent of his profit earned
Explanation
Sole proprietors have unlimited liability. This implies that the owner is personally responsible for payment of debts in case the assets of the business are not sufficient to meet all the debts. As such the owner’s personal possessions such as his/her personal car and other assets could be sold for repaying the debt.
A change in a company's registered office from one state to another may be effected by
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An ordinary resolution
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A resolution of the board of directors
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A special resolution
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A special resolution and confirmation from the Company Law Board
Explanation
Option D is the correct answer.
The shareholder's liability in a public company is limited to
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The extent of their private estates
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The nominal value of shares
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The paid-up value of shares
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The amounts called up on shares
Explanation
Option B is the correct answer.
The individual proprietorship form of business is not advisable for enterprises that
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Require small capital
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Need personalised attention to customers
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Do not involve heavy risk
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Are large in size
Explanation
Sole proprietorship is a business that suits the ones who wants to carry out the business on smaller scale.
Which of the following companies must file a statement in lieu of prospectus?
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A private limited company
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A cooperative society
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A company that has issued a prospectus
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A public company that has not issued a prospectus.
Explanation
Option D is the correct answer.
Which of the following documents may be changed with retrospective effect?
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Memorandum of association
0%
Prospectus
0%
Articles of association
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None of the above
Explanation
Option C is the correct answer.
The _____ defines a company's relations with the outside world.
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Prospectus
0%
Memorandum of association
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Articles of association
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Statement in lieu of prospectus
Explanation
Option B is the correct answer.
The rules and regulations for the internal management of a company are contained in its
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Prospectus
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Annual report
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Memorandum of association
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Articles of association
Explanation
Option D is the correct answer.
While incorporating a company, a statutory declaration is made by
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A chartered accountant
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An advocate
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A person named in the articles as a director
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Any of the above
Explanation
Option D is the correct answer.
Limited liability is a feature of
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Partnership
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Company
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Sole Proprietorship
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All of the above
Explanation
Option B is the correct answer.
The following are some of the
characteristics
of a
joint stock company
:
Independent legal entity.
Limited
liability.
Common seal.
Separate ownership and management.
Transferability of
shares
.
Perpetual existence.
Association of persons.
The ______ constitute the top administrative organ of the company.
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Shareholders
0%
General manager
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Board of directors
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Advisory panel
Explanation
Option C is the correct answer.
Any outsider dealing with the company is deemed to have knowledge of its memorandum and articles, according to the
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Principle of constructive notice
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Principle of management by exception
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Doctrine of indoor managemetn
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None of the above
Explanation
Option A is the correct answer.
A/an _________ may become a director of a company.
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Partnership firm
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Person of unsound mind
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Individual
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Body corporate
Explanation
Option C is the correct answer.
How many directors must a company (deemed to be a public company as per Sec.$$43$$A) have?
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Two
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Five
0%
Seven
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Ten
Explanation
Option A is the correct answer.
Which of the following is a kind of partial consolidation?
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Trust
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Holding company
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Community of interests
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All the above
Explanation
It was a method of including income, expense, assets and liabilities in proportion to a firm's percentage of participation in a joint venture.Under U.S. generally accepted accounting principles (GAAP), a firm's interest in a joint venture is accounted for using the equity method.
The partnership entity may be regarded as
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A legal entity
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An accountable entity
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Both a legal and accountable entity
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Neither a legal nor an accountable entity
Explanation
Option D is the correct answer.
Tick mark the correct answer.
Test-checking implies checking_________________ .
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Each and every item
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A representative sample of items
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Only a few items in detail
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Random items
Explanation
Test-checking implies checking a representative sample of items The items which are checked during test-checking usually represents each and very items' features. Test checking helps to evaluate the quality of the items. It involves checking a sample of items randomly.
A holding company that controls its subsidiaries but is itself a subsidiary controlled by another holding company is known as a/an ______ holding company.
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Pure
0%
Primary
0%
Mixed
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Intermediate
Explanation
Option D is the correct answer.
Tick mark the correct answer.
Physical verification of fixed assets is the primary responsibility of the___________.
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Auditor
0%
Management
0%
Government
0%
Shareholders
Explanation
Option A is the correct answer.
Physical verification of fixed assets is the primary responsibility of the auditor.
Tick mark the correct answer.
A firm has these characteristics: it is involved in the manufacture of custom built machinery, its products have shorter life span, the products are processed through different specialists, and the products have a rigid time schedule to be met. In such a circumstance, which one of the following would be the form of organisation best suited to achieve the objectives?
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Functional organisation
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Line and Staff organisation
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Project (Matrix) organisation
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Line organisation
Explanation
Option C is the correct answer.
The features of partnership is
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Sharing of profits
0%
Unlimited liablity
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Implied agency to partners
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All of the above
Explanation
Option D is the correct answer.
A Secretary's duties under the Companies Act are _________________.
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Purely ministerial
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Either ministerial or administrative
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Managerial
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Supervisory
Explanation
A Secretary's duties under the Companies Act are either ministerial or administrative. The company secretary is responsible for the efficient administration of a company, particularly with regard to ensuring compliance with statutory and regulatory requirements and for ensuring that decisions of the board of directors are implemented.
For the purpose of quorum in a general meeting, joint holders of shares are treated as ________________.
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One member
0%
Two members
0%
Equal to the number of joint holders
0%
Disqualified
Explanation
Option A is correct.
Joint shareholders will be regarded as one member for the purpose of quorum: Any joint shareholder present at the meeting will be entitled to exercise his/her voting power and will be counted for the quorum as one shareholder. These representatives have all the rights of members including right to vote by proxies.
Tick mark the correct answer.
In a functional organisation.
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There are no advisers, the executives alone having the authority and competence
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There are specialist advisers having no authority
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The entire organisation is divided into functions with specific role for specialist
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The organisation is divided into functions with specialities having authority
Explanation
option D is the correct answer.
Of the following organisations, the easiest to wind up is the
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Public Limited Company
0%
Multinational Corporation
0%
Private Limited Company
0%
Partnership Firm
Explanation
Option D is the correct answer.
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