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CBSE Questions for Class 9 Elements Of Business Steps Involved In Establishing Business Quiz 11 - MCQExams.com
CBSE
Class 9 Elements Of Business
Steps Involved In Establishing Business
Quiz 11
Firm may be dissolved :
A. With the consent of all the partners.
B. In accordance with the contract between them.
Select the correct the answer from the options given.
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Neither A nor B
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B only
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Either A or B
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A only
Explanation
Option C is the correct answer.
Every partner is bound to carry on the business of the firm _________.
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To the advantage of the working partner
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For reasonable advantage
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For the advantage of society
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To the greatest common advantage
Explanation
A partnership basically refers to the contract between two or more people who have agreed to carry on certain business in order to achieve common goals.
The basic existence of partnership agreement lies in Mutual agency relationship which refers to the mutual relationship and understanding between the partners of a business where every partner acts as an agent as well as a boss for the other partner. Therefore, every partner is bound to carry on the business of the firm to the greatest common advantage.
Which of the following is not a right of partner?
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Every partner has a right to continue in the partnership and not to be expelled from it
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A partner has power to act in an emergency for protecting the firm from loss
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Every partner is entitled to share in the profits equally
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Every partner is entitled to the introduction of a new partner into the firm without consent other partner
Explanation
According to the Partnership Act 1932, a partner has no right to any introduction as a new partner into the firm without the consent of other partners.
Hence, option (D) is the correct answer.
Property of the firm shall be held by use of the partners __________.
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Exclusively for business purposes
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For business purposes as well as private purposes of the partners
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For the private purposes of the partners
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For charitable purposes
Explanation
A partnership basically refers to the contract between two or more people who have agreed to carry on certain business in order to achieve common goals. In the absence of any partnership deed, all the property, rights and interest contributed by the individual partners, all the property acquired in the course of the business, and the goodwill of the business is considered as the property of the firm. These properties should be used by all the partners exclusively for business purposes only.
Hence, A is the correct option.
Subject to contract between the partners, for taking part in the conduct of the business, a partner is _________.
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Not entitled to receive any remuneration
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Entitled to reasonable remuneration
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Entitled to remuneration based on profits
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Entitled to remuneration in the ratio of their capital
Explanation
According to the Partnership Act 1932, the partners those are in agreement with the partnership deed who are taking part in the conduct of business and management of the firm are not entitled to receive any remuneration of any sort.
In good faith and based on the contract between partners, a partner may be expelled from the firm by ______________.
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Unanimous consent of all the partners
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Majority of the partners
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Any of the working partners
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Any of the dormant partners
Explanation
According to the Partnership Act 1932, the partners those are in agreement with the partnership deed who are taking part in the conduct of business and management of the firm and those who are dormant partners can decide on majority whether to expel a partner or not otherwise in good faith.
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
In a partnership firm, the partners who perform all the functions related to the conduct of the business are required to perform all such business with utter responsibility.
Hence, option (B) is the correct answer.
The implied authority of any partner may be _________________.
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Restricted by contract between the partners
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Extended by contract between the partners
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Either extended or restricted by contract between the partners
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Can be extended but not restricted by contract between the partners
Explanation
Option C is the correct answer.
To bind the firm under implied authority, the act must be done in the ________ of carrying on the firm's business.
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Regular way
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Usual way
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Routine way
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Extraordinary way
Explanation
Implied Authority is the authority that is not conferred by the mutual agreement between the partners and which is not bind on other partners. This authority is acted on the ordinary course of business and the firm is bound by such authority when the act is done in a normal way of carrying on the firm's business. These authority is also known as ostensible authority or apparent authority.
If all partners, or all but one partner, of the firm are declared insolvent ___________.
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Firm is also declared insolvent
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Solvent partner has to repay the debts of the firm
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Firm is automatically dissolved
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Firm can be continued
A, B, C are partners on death of B, A and C continue the firm's business. This is a case of ________.
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Dissolution of partnership
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Dissolution of firm
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Death of partnership
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All of the above
Which of the following act is within the implied authority?
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Settlement of accounts with third parties
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Open a bank account on behalf of the firm in the partner's own name
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Compromise or relinquish any claim or portion of claim by the firm
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Submit to arbitration, a dispute relating to the business of the
Explanation
Implied Authority is the authority that is not conferred by the mutual agreement between the partners and which is not bind on other partners. This authority is acted on the ordinary course of business and the firm is bound by such authority when the act is done in a normal way of carrying on the firm's business. These authority is also known as ostensible authority or apparent authority. The settlement of accounts with the third parties is considered as implied authority.
For loss caused to the firm by his fraud in the conduct of the business, every partner shall __________.
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Indemnify the firm
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Indemnify the other partner
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Indemnify all the retiring partners
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Indemnify only to working partners
Explanation
According to the Partnership Act 1932, the liability of the partners is unlimited and they are bound to compensate with the loss of the firm that is caused by the fraud in the conduct of business.
Hence, A is the correct option.
N & Z are partners in a firm dealing in stationery. N placed order in the firm's name and on the firm's letter pad for $$10$$ bags of wheat to be supplied at his residence _______________.
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The firm is not liable for N's act
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The firm is liable for N's act
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A has acted within his implied authority
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A has acted within his implied authority and hence firm is liable to pay
Every partner is an agent of the firm and of other partners for __________________.
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The purpose of the management of the firm
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The purpose of other partners
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The purpose of liability to third parties
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The purpose of the business of the firm
Who can give Public Notice of retirement of partner?
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All the partners of the reconstituted firm
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By the retiring partner or any partner of the reconstituted firm
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Any partner of the reconstituted firm
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Retiring partner only
__________ rule is applicable at the time of any partner becoming insolvent.
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Garner Vs Murray
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Derry Vs Peek
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Salmon Vs A. Salomon & Co. Ltd
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Mohiri Bibi Vs Dhamodas Ghose
Upon dissolution, the firm's assets shall be first applied in paying the debts of the firm to third parties, shall thereafter be applied in payment of partners loan, shall be applied in ___________.
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In paying the debts of the firm to third parties
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Payment of partners loan
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Payment of partners capital
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Distribution of surplus to partners in profit sharing ratio
Upon dissolution, which is the proper order for application of the Firm's assets?
I. Payment of partners loan
II. In paying the debts of the firm to third parties
III. Distribution of surplus to partners in profit sharing ratio
IV. Payment of partners capital
Select the correct answer from the options given.
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I, IV, III, II
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II, I, IV, III
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II, I, III, IV
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I, II, III, IV
Explanation
Option B is the correct answer.
The Court may dissolve a firm if a partner _________ commits breach of agreements relating to management of the affairs of the firm or the conduct of the firm's business.
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Wilfully
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Persistently
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Neither (A) nor (B)
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Both (A) and (B)
In settling the accounts of a firm after dissolution, losses, including deficiencies of capital, shall be paid _________________.
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Out of profits
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Out of capital
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By the partners individually in the proportions in which they were entitled to share profits
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First out of profits, next out of capital, and, lastly, if necessary, by the partners individually in the proportions in which they were entitled to share profits
Identify which of the following statement is true and which is false.
(I) The Court may dissolve a firm if a partner conducts himself in such a way that if is not reasonably practicable for the other partners to carry on business in partnership with him.
(II) If the firm has been continuously suffering losses and it is apparent that in future also the business cannot be carried on except at a loss, the Court cannot order dissolution of the firm
Select the correct answer from the options given.
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(I)-True, (II)-False
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(I)-False, (II)-False
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(I)-False, (II)-True
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(I)-True, (II)-True
In which of the following case, the Court may, at the suit of a partner. dissolve a firm?
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Partner wilfully and persistently commits breach of partnership agreement as management
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Partner conducts himself in such a way that it is not reasonably practicable for the other partners to carry on business in partnership with him
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The firm has been continuously suffering losses and in future also the business cannot be carried on except at a loss
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All of the above
In which of the following situations the firm will NOT be compulsorily dissolved?
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All partners or any one of the partners is declared insolvent
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The business of the firm become unlawful
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The partnership has various adventures & one such adventure becomes illegal
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The decision is taken by all the partners to dissolve the firm
In which of the following case Garner Vs Murray rule is NOT applicable?
$$1$$. Only one partner is solvent.
$$2$$. All partners are insolvent.
$$3$$. When partnership deed provides a specific method to be followed in case of insolvency of a partner
Select the correct answer from the options given.
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$$1$$ only
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$$1$$ & $$2$$ only
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$$3$$
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$$1, 2$$ & $$3$$
Sole traders operate mostly on a small-scale basis and their number is large. Identify the particular advantages.
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Ease of formation and closure
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Secrecy of information
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Social utility
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All of the above
Explanation
Sole traders operate mostly on a small-scale basis and their number is large. Social utility is one of the advantages of sole proprietorship or sole trader. Sole trader can be referred as the single individual who takes all initiatives and run the business. 'Sole' means singe and 'proprietorship' means ownership. The business organization in which the single owner owns, manages and controls all the activities of the business is known as sole proprietorship form of business organization.
As the business flourishes, a sole proprietorship might not get a chance to decrease costs as it lacks the economies of large scale business.
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True
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False
Explanation
As business flourishes, a sole proprietorship might not get a chance to decrease costs as it lacks the economies of large scale business- this is a true statement. Sole proprietors operate mostly on a small-scale basis and their number is large. 'Sole' means singe and 'proprietorship' means ownership.
The business organization in which the single owner owns, manages and controls all the activities of the business is known as sole proprietorship form of business organization.
Persons who have entered into partnership with one another are individually known as.
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Co-owner's
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Firm
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Partnership
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Partner
Explanation
Persons involved in partnership are individually known as partners.
The number of partners in firm carrying an banking business should not exceed ________.
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$$25$$
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$$20$$
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$$50$$
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$$100$$
Explanation
Option C is the correct answer.
The fate of sole proprietorship is connected to the sole proprietor. What does this convey about the sole proprietorship?
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Unlimited liability
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Uncertain life
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Limited managerial ability
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Lack of economies of scale
Explanation
The fate of sole proprietorship is connected to the sole proprietor. This conveys about uncertain life about the sole proprietorship. In sole proprietorship type of business the single individual takes all initiatives and run the business.
'Sole' means singe and 'proprietorship' means ownership. The business organization in which the single owner owns, manages and controls all the activities of the business is known as sole proprietorship form of business organization.
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