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CBSE Questions for Class 11 Commerce Business Studies Forms Of Business Organisation Quiz 7 - MCQExams.com
CBSE
Class 11 Commerce Business Studies
Forms Of Business Organisation
Quiz 7
Partnership is an agreement between _______________.
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0%
entities in a business
0%
two people
0%
organisations
0%
friends
Explanation
Partnership is an agreement between entities in a business which ar
ises out of an agreement, a
Partnership Agreement
is a contract between
two or more individuals
or entities who decides to
manage and operate a business together for profit-making
.
The Agreement defines the
management roles
and once the Partnership Agreement is completed, all of the Partners will sign and date the Agreement and keep copies of the Agreement for their records.
Thus the correct answer is A.
Every business enterprise is an independent undertaking.
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True
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False
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Partly True
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Partly False
Explanation
Every business enterprise is an independent undertaking because every business enterprise has separate identity, independent ownership, independent management and independent risk bearance.
____________ is the most flexible kind of business Organisation.
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Sole Proprietorship
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Partnership
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Co-Operatives and Trusts
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Limited Liability Partnership
Explanation
A sole proprietorship
is the most flexible kind of business Organisation because it
is a one man show, i.e. right to run the business and to make all the decisions, lies absolutely with the sole proprietor. He is the one who will take all the decisions and can change them as well.
Thus the correct answer is A.
Which of the following are a form of a business enterprise?
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Partnership
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Cooperative
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Joint hindu family
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All of the above
Explanation
Partnership- A partnership is a business that is formed by two or more people. Much like a sole proprietorship, setting up a general partnership has very few start-up fees.
Cooperative- It is "an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise".
The Joint Hindu Family Business is a distinct form of organisation peculiar to India. Joint Hindu Family Firm is created by the operation of law. It does not have any separate and distinct legal entity from that of its members.
Following is not a characteristic of sole proprietorship business _______________.
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Easy to form and wind up
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Difficult to maintain secrets
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Direct motivation
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None of the above
Explanation
Characteristics of Sole proprietorship business are-
1. : There is no separate law that governs sole proprietorship. Hardly any legal formalities are required to start a sole proprietary business, though in some cases one may require a license. Closure of the business can also be done easily. Thus, there is ease in formation as well as closure of business.
2. The risk of failure of business is borne all alone by the sole proprietor. However, if the business is successful, the proprietor enjoys all the benefits. He receives all the business profits which become a direct reward for his risk bearing.
3. The right to run the business and make all decisions lies absolutely with the sole proprietor. He can carry out his plans without any interference from others and there is no difficulty in maintain secrets.
Option D is the correct option.
Profit sharing among members in an HUF is done _______.
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members status in family
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amount of work done by a member
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equally
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according to the age of the member
Explanation
Profit sh
aring among members in an HUF is done equally even
In a
HUF
business
all co-parceners have
equal
share in the
profits
of the business, w
hen in any case
HUF
is dissolved, all the property held by them are divided
equally
a
mong
all
members
.
Thus the correct answer is C.
The money contributed to the company by its members is its __________ and is known as the member's __________.
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assets, share
0%
profit, investment
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capital, share
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none of the above
Explanation
Option C is the correct answer.
Persons entering into partnership contract may be.
$$(1)$$ Natural persons
$$(2)$$ Artificial persons
Select the correct answer from the options given:
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$$(1)$$ only
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$$(2)$$ only
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Combination of $$(1)$$ and $$(2)$$
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$$(1)$$ or $$(2)$$ or combination of $$(1)$$ and $$(2)$$
Explanation
Option D is the correct answer.
The members of an HUF are also known as _______.
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family
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partners
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co-parceners
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none of the above
Explanation
Member in HUF other than KARTA is called as
Coparcener, as per the
Hindu Succession Act, 1956, any individual born in a Hindu Undivided Family (HUF) becomes a
coparcener
by birth. H
e is
a person who acquires interest in the joint family property by birth.
Both sons and daughters are the c
oparceners
in the family and they have equal rights and liabilities over the property.
Thus the correct answer is C.
An HUF continues to exist even upon the death of the Karta.
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Partly false
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False
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Partly true
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True
Explanation
The statement is True as a
HUF continues to exist even upon the death of the Karta as the
HUF business can only be dissolved at any time t
hrough mutual agreement between members, b
y a partition, etc. but it keeps ongoing if the Karta dies,
Thus the correct answer is D
.
Even a single partner may be called upon to pay the debts of a partnership firm.
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Partly true
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True
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Partly false
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False
Explanation
The statement is true because e
ven a single partner may be called upon to pay the debts of a partnership firm. As per the partnership Act, e
very partner is liable, jointly with all the other partners and also severally, for all acts of the firm done by them. The Partners will be held personally responsible for another partner's
carelessness.
Thus the correct answer is B.
The sole proprietorship form of business discourages self employment.
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True
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False
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Partly true
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Partly false
Explanation
The statement is False as a
sole proprietorship form of business does not discourage self-employment even t
hese types of businesses are very popular among sole owners of businesses, individual self-contractors, and consultants. Many sole proprietors do business under the registration of their own names as it is not necessary for these types of business.
Thus the correct answer is B.
The risk of the sole proprietorship business is shared with the employees of the business _______________.
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Partly true
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True
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Partly false
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False
Explanation
The statement is False as the risk of the sole proprietorship business is not shared with the employees of the business, it will only be bear by sole proprietor because he is the only one who will take the risk of the Business.
Thus the correct answer is D.
In HUF business, all the members own the business jointly.
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Partly true
0%
True
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Partly false
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False
Explanation
The HUF form of business all the members of a hindu undivided family own the business jointly.
A Hindu family can come together and form a HUF as o
ne person cannot form HUF, it can only be formed by a family, it
consists of a common ancestor and all of his lineal descendants, including their wives and unmarried daughters.
Thus the correct answer is B.
The written agreement to enter into a partnership is known as _______.
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partnership deed
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partnership agreement
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partnership contract
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all of the above
Explanation
The written agreement
to enter into a partnership is known as
the partnership deed.
It
is a contract between
two or more individuals
who decide to
manage and operate a business together for profit-making
.
The deed defines the
management roles
and once the Partnership deed is completed, all of the Partners will sign and date the deed and keep copies of the deed for their records.
Thus the correct answer is A.
The business affairs of an HUF is managed by _______.
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managing director
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parents of minors
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karta
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eldest male and female member of the family
Explanation
The affairs of the business are managed by the head of the family, who is known as the KARTA,
he is the senior-most male member of the family
who is responsible for handling the affairs of the family.
He has the power of managing all assets and other financial matters of the family.
Thus the correct answer is C
.
What is the minimum number of members required to form a co-operative society?
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$$5$$
0%
$$7$$
0%
$$10$$
0%
$$15$$
Explanation
As per the Co-operative societies Act, a
minimum of
ten
members are required to form a cooperative society but this act does not specify the maximum number of members for any co-operative society. So it states that at least ten members should be there to form a cooperative society.
Thus the correct answer is C.
The liability of a shareholder of a company is to the extent of ________.
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face value of shares
0%
unpaid value of shares
0%
both
0%
none of the above
Explanation
Option B is the correct answer.
One of the disadvantages of a company form of business is ________.
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its full legal cover
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recognized legal entity
0%
stock exchange speculation
0%
none of the above
Explanation
Option C is the correct answer.
Disadvantages of Joint Stock Company
:
Difficulty in Formation: ADVERTISEMENTS
Reckless Speculation Encouraged
Fraudulent Management
Delay in Decision-Making
Monopolistic Powers
Excessive Regulation by Law
Conflict of Interests
Lack of Secrecy
The main objective of the co-operative society are ________.
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rendering service rather than earning profit
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mutual help instead of competition
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self help in place of dependence
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all of the above
The partners have a ___________ relationship.
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family
0%
principal and agent
0%
business
0%
none of the above
Explanation
The partners have a relationship like a Principal and Agent, a
partner
is an
agent
to the other
partner
as his acts bind the other
partners
. He is
principal
as he can be held liable for the acts of the other
partners
. So we can say the partners have a principal and agent relationship.
Thus the correct answer is B.
What is the maximum strength of HUF?
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$$20$$
0%
$$10$$
0%
$$50$$
0%
No limit
Explanation
There is no limit on maximum strength of HUF.
Which of the following is an advantage of HUF?
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Favourable Credit Standing
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Greater Management Ability
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Profit Incentive
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None of the above
Explanation
A Hindu family can come together and form a HUF. The following are the
advantage of HUF:
1.
Members of Hindu Undivided Family can easily avail loans.
2. D
ifferent taxable units of HUF can be created.
Options A, B, and C are not advantages of the HUF.
Thus the correct option is D.
The official signature of the company is known as ________.
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company logo
0%
company seal
0%
common seal
0%
common signature
Explanation
The official signature of the company is known as
the
company seal. It is
the corporate
seal
used by a
company for the d
ocuments that need to be executed as deeds. T
he company is an artificial person who acts through its Board of Directors. The Board of Directors enters into an agreement with others by indicating the company's approval through a
common seal
.
Thus the correct answer is C.
Compared to licensing, franchising is a more advantageous entry mode because ________________________.
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It generates economies of scale in marketing to international customers
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It is low-risk and low-cost
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It offers greater control
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All the above
Explanation
Option D is the correct answer.
Which of the following is not the requirement in Partnership deed?
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Capital contribution by each partner
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Profit sharing
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Total assets of the partner
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Method of dissolution
Everything is an advantages of joint ventures except __________________.
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The costs of a new project can be split between the companies involved
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Manufacturing costs will be divided between the firms in the venture
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Joint ventures between firms in different countries can create new market opportunities
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Management of the joint venture will lead to disagreements
One of the hardships of a sole proprietorship is that _________________.
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Capital is limited to owner's savings and bank loans
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It has to complete too many registration fomalities
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As they are government owned there is no profit motive
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More tax is charged on them
Explanation
Option A is the correct answer.
One of the hardships of sole proprietorship is that the capital that it can contribute is very limited .Public funds cannot be raised in sole proprietorship.
The choice of an appropriate form of business organisation largely depends upon:
I. Ease of formation
II. Continuity and stability
III. Liability aspects.
Correct option is __________.
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I and II
0%
II and III
0%
I and III
0%
I, II and III
The most suitable definition of a sole trader form of business organization is ____________________.
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The business who manufacture only one product.
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The business is owned by one person.
0%
The firm has a single buyer.
0%
There is a single seller is the industry.
Explanation
Briefly sole proprietorship is the business where there is a single owner and he will be entitled to all the profits and losses of the business.
A, B, C & D are partners A retires, B dies, the status of partnership _____________.
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Remains unchanged
0%
Comes to an end
0%
Reconstituted
0%
All of the above
Explanation
Option B is the correct answer.
Which form of business organisation has a separate legal entity?
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Hindu Undivided Family (HUF)
0%
Co-operative society
0%
Partnership firm
0%
Sole proprietorship
At the time when a new partner enters, Good will _________________________.
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belongs to all partners, new and old
0%
belongs only to the new partner who is going to be admitted.
0%
belongs only to the old partner who have credited it
0%
none of the above
Food co-operation of India is _______________.
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A joint stock company
0%
Company managed by department
0%
Company established by special act of parliament or state assembly
0%
None of the above
Explanation
Food co-operation of India is a joint stock company.
For the formation of the contract of sale of goods, there should be ________________.
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two parties
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one party
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more than 2 parties
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both A & B
It is NOT UNCOMMON in partnership firm _______.
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co-owner can ask for the division of property
0%
co-owner can transfer his rights without the consult of others.
0%
co-owner has no. lien on property of business
0%
all the above
Explanation
D is the correct answer.
Following are the elements which constitute a partnership _____________.
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there must be a contact regarding a partnership
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there must be an association of two or more persons
0%
there should be $$7$$ persons
0%
both a & b
Explanation
The following are the elements which constitute a partnership:
1. T
here must be a contract regarding a partnership.
2. T
here must be an association of two or more persons.
3. Profit-making motive etc.
Thus the correct option is D.
A partner of a trading or non trading firm signs a Negotiable instrument liability incurs in _____________.
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The name of the firm
0%
In the name of partner
0%
Both a & b
0%
None of the above
All of the following are claimed advantages of joint venture except ____________________________.
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the costs of a new project can be split between the companies involved
0%
manufacturing costs will be divided between the firms in the venture
0%
joint ventures between firms in different countries can create new market opportunities
0%
management of the joint venture will never lead to disagreements
Explanation
Option D is the correct answer.
An idea of operating as a partnership would include ________________.
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greater power than a sole trader for decision making
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being able to raise capital through share issues
0%
access to larger amount of initial capital
0%
limited liability for all partners
Explanation
Option C is the correct answer.
An ordinary partnership business can not have ___________________.
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more than $$50$$ partners.
0%
not more than $$20$$ partners.
0%
any number of partners.
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any number than $$2$$partners.
Explanation
Option B is the correct answer.
Increase in the number of working women and the rise in number of family households are examples of _______________.
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the geographic shifts in population.
0%
the changing family.
0%
the changing age structure of the population.
0%
a better-educated and more white-collar population
Explanation
Option B is the correct answer.
The term company is defined under which sec of the Act?
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Sec 3(1)
0%
Sec 4 (2)
0%
Sec 5 (4)
0%
Sec 1(3)
Explanation
As per the section 3(1) of the companies act:
(1) In this Act, unless the context otherwise requires, the expressions" company"," existing company"," private company" and" public company" shall, subject to the provisions of sub- section (2), have the meanings specified below:-
(i)
" company" means a company formed and registered under this Act or an existing company as defined in clause (ii);
(ii)
" existing company" means a company formed and register- ed under any of the previous companies laws.
Now these provisions are dealt by the Companies Act, 2013.
New incoming partner pays his share of goodwill in cash, and profit sharing ratio of old partner is changed, Goodwill be distributed among old partners ____________.
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0%
as their old profit ratio
0%
according to new ratio
0%
according to sacrifice ratio
0%
none of these
Mr. Varun is a rich man with ample amount of working capital. He wants to go for a business of chain of $$5$$ star holds. What kind of business organization you will suggest him_________________.
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company
0%
partnership
0%
sole Proprietorship
0%
trust
Mr. X is planning to take a business of manufacturing cheap medicines in India. The most suitable type of organization will be_______________.
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company
0%
corporation
0%
partnership
0%
society
This is UNTRUE about LLP_______________.
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it has no perpetual existence
0%
no requirement of minimum capital
0%
easy to wind up
0%
less cost of formation
A co-operative society can promise maximum _________ amount of interest on the money contributed by its members.
Report Question
0%
$$9\%$$
0%
$$6\%$$
0%
$$5\%$$
0%
unlimited rate of interest
The main purpose of business organization is to______________.
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conduct business
0%
earn profit
0%
establish relationship between men and material
0%
all of the above
Explanation
Although the main objective of business is to earn profit but it is not be the sole objective of business. Business has many other objectives to accomplish.
Who has the power to transfer the joint porperty of HUF so as to bind the interest of both adult and minor coparceners?
Report Question
0%
Son's of the HUF
0%
Duaghters of the HUF
0%
All the co-parceners of HUF
0%
Karta of HUF
Explanation
Option D is the correct answer.
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