Business & Commercial Knowledge Test - 1

Providing services to the public is the main objective of a public service enterprise. An important objective of public enterprises is to prevent the concentration of economic power and growth of private monopolies. Public sector helps the government to enforce social control on trade and industry for ensuring equitable distribution of goods and services, Public sector organisations are businesses set up with the aim of providing a public service rather than making a profit. Social enterprises are private organisations that are run along business lines, but where any profits are reinvested into the community or into social or environmental projects.

Hence, the correct option is (a). ✅

Companies with higher growth rate are likely to pay lower rate of dividend. Companies with higher growth rate would prefer to plough back its profit for the growth of the company which would result in long term benefits rather than distributing dividends which is temporary.

Hence, the correct option is (a). ✅

Buying and selling of goods and services in large quantities for the purpose of resale or intermediate use by wholesale trader.

Hence, the correct option is (c). ✅

Owner's funds are the funds that are provided by the owners of an enterprise, which may have sole trader or partner or shareholder of a company. The owner's capital is invested for a long period of time. Such capital forms the basis on which owners acquire their right of control of management. An issue of equity shares and retained earnings are the two important sources where owner's funds can be obtained. 

Hence, the correct option is (a). ✅

According to economic theory, there are four main factors of production - land, labour, capital, and entrepreneurship. In the given options, first three are the factors of production while the fourth option of Product is not the main factor of production.

Hence, the correct option is (c). ✅

A transfer is a horizontal or lateral movement of an employee from one job, section, department, shift, plant or position to another at the same or another place where his salary, status and responsibility are the same. Transfer may be initiated either by the company or the employee.

Hence, the correct option is (b). ✅

As far as initial business setting-up costs are concerned, sole proprietorship is the least expensive way to start a business. 

The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts.

Hence, the correct option is (b). ✅

Immediate Payment Service (IMPS) is an instant payment inter-bank electronic funds transfer system in India. IMPS offers an inter-bank electronic fund transfer service through mobile phones. Unlike RTGS, the service is available 24×7 throughout the year including bank holidays.

Hence, the correct option is (c). ✅

The most efficient scale of production of a firm is where LAC is minimum. LAC at the efficient scale of production is thus the minimum average cost.

Hence, the correct option is (b). ✅

Treasury bills, also known as T-bills, are short term (debt) money market instruments. The RBI on behalf of the government to curb liquidity shortfalls. It is a promissory note with a guarantee of payment at a later date. The funds collected are usually used for short term requirements of the government.

Hence, the correct option is (d). ✅