Forms of Business Organisations Test

Result

Forms of Business Organisations Test - 30

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Weekly Quiz Competition

Question 1
1 / -0

The business started by a group of persons can be ________.

A
Company

B
Hindu Undivided Family

C
Partnership

D
Any of the above

Solution

Company, Hindu Undivided Family and Partnership are the business organsations which is started or operated by more than one person or owner.
For Example- Company have shareholders as its owner, HUF has its family members as its owner and Partnership has the partners as its owner.
Question 2
1 / -0

______________ business is a form of business organisation found only in India.

A
The company

B
The Hindu Undivided Family (HUF)

C
The partnership

D
The trust
Question 3
1 / -0

Which of following form of business is the most simple and common in our country?

A
Statuary corporations

B
Sole proprietorship

C
Company

D
All of above

Solution

Sole Proprietorship is a form of business which is the most simple and common in our country. It is owned and controlled by one person. The main features of the proprietorship form of business are:
1. Single owner
2. Unlimited liability
3. No sharing of profit and loss
4. No Separate Business Entity
5. Less formalities
Thus the correct answer is B.
Question 4
1 / -0

Which of the following statement is/are TRUE and which is/are FALSE?
I. Sole proprietorship business includes only shopkeepers.
II. In sole proprietorship business the proprietor has full control over each and every activity of the business.
III. The sole proprietor is always in a position to maintain good personal contact with the customers and employees.

Select the correct answer from the options given below:

A
I - False

II - False

III - True

B
I - False

II - True

III - True

C
I - True

II - False

III - True

D
I - False

II - True

III - False

Solution

1. False because this form of business not only includes in retail sector but also includes in areas of personalised services such as beauty parlours, hair saloons and small scale activities.
2. True as Sole proprietorship refers to a form of business organisation which is owned, managed and controlled by an individual who is the recipient of all profits and bearer of all risks.
3. False because sometimes it is diffucult for a single person to control each and activity of the business so sometimes it requires to have other persons to manage other activities.
Question 5
1 / -0

Sole proprietorship form is not suitable _______________.

A
Where capital requirement is large and risk involvement is heavy.

B
Where manual skill is required.

C
Where the market for the product is small and local.

D
All of above.

Solution

The sole proprietorship form is not suitable where the capital requirement is large and risk involvement is heavy because the higher the capital higher will be the risk and it is only suitable for the small business with less capital.
Thus the correct answer is D.
Question 6
1 / -0

Which of following is advantages (A) and which is disadvantage (D) of sole proprietorship form of business?
(i) Maintenance of business secrets
(ii) Limited capital
(iii) Quick decision and prompt action
(iv) Lack of continuity
Select the correct answer from the options given below.

A
i - A

ii - A

iii - A

iv - A

B
i - D

ii - D

iii - D

iv - D

C
i - A

ii - D

iii - A

iv - D

D
i - D

ii - A

iii - D

iv - A

Solution

Sole proprietorship, also known as the sole trader, individual entrepreneurship or proprietorship, is a type of enterprise that is owned and run by one person.'
Advantages: ease of start-up and closure, pride of ownership, retention of all profits, Secrecy, Quick decision making.
Disadvantages: unlimited liability, lack of continuity, Limited capital, limited management skills, and difficulty in hiring employees.
Question 7
1 / -0

Characteristics of sole proprietorship form of business is/are :
1. Single owner
2. Unlimited liability
3. Control by partner
4. No sharing of profit and loss

A
1 and 4 only

B
2, 3, 4

C
2 and 1 only

D
4, 2 and 1

Solution

Sole proprietorship is owned and controlled by one person. The main features of the proprietorship form of business are:
1. Single owner
2. Unlimited liability
3. No sharing of profit and loss
4. No Separate Business Entity
5. Less formalities
Thus the correct answer is D.
Question 8
1 / -0

Sole proprietorship form is most suitable ____________.

A
Where the market for the product is small and local.

B
Where customers are given personal attention, according to their personal tastes and preferences.

C
Where capital requirement is small and risk involvement is not heavy.

D
All of above.

Solution

The sole proprietorship form is most suitable only in the following cases:
1. The market for the product is small and local.
2. Where customers are given personal attention, according to their personal tastes and preferences.
3. Where the capital requirement is small and the risk involved is not heavy.
4. It is the simple type of business that can be started by an individual.
Thus the correct answer is D.
Question 9
1 / -0

A HUF business can be dissolved any time ___________________.

A
Through mutual agreement between members

B
By partition

C
Either A or B

D
Only through order of court

Solution

A HUF business can be dissolved at any time through mutual agreement between members, by a partition, etc. The dissolution of HUF occurs when there is a partition of HUF’s property. The Partition of HUF can occur at any time and it leads to the dissolve of the HUF. Through a mutual agreement between members, they can decide whether they want to continue or not.
Thus the correct answer is C.
Question 10
1 / -0

Identify which statement is true and which is false?
1. Any person can become member of HUF.
2. In a HUF business, in the event of death of any of the co-parcener, his wife can claim share of profit.
3. In a HUF business, the liability of the karta is Unlimited.
Select the correct answer from the options given below.

A
2 and 3

B
1 and 3

C
3 and 2

D
None of the above

Solution

The statement fore mentioned are discussed below:
1. False. As per the Hindu Law all persons lineally descended from a common ancestor are members of a HUF.
2. True. In a HUF business in the event of death of any of the co-parcener , his wife can claim share of profit.
3. True. In a HUF busines the liability of the karta is unlimited.

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Re-Attempt Weekly Quiz Competition

Forms of Business Organisations Test - 30

Result

Forms of Business Organisations Test - 30

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SHARING IS CARING

Question 1

Company

Hindu Undivided Family

Partnership

Any of the above

Solution

Question 2

The company

The Hindu Undivided Family (HUF)

The partnership

The trust

Question 3

Statuary corporations

Sole proprietorship

Company

All of above

Solution

Question 4

I - FalseII - FalseIII - True

I - FalseII - TrueIII - True

I - TrueII - FalseIII - True

I - FalseII - TrueIII - False

Solution

Question 5

Where capital requirement is large and risk involvement is heavy.

Where manual skill is required.

Where the market for the product is small and local.

All of above.

Solution

Question 6

i - Aii - Aiii - Aiv - A

i - Dii - Diii - Div - D

i - Aii - Diii - Aiv - D

i - Dii - Aiii - Div - A

Solution

Question 7

1 and 4 only

2, 3, 4

2 and 1 only

4, 2 and 1

Solution

Question 8

Where the market for the product is small and local.

Where customers are given personal attention, according to their personal tastes and preferences.

Where capital requirement is small and risk involvement is not heavy.

All of above.

Solution

Question 9

Through mutual agreement between members

By partition

Either A or B

Only through order of court

Solution

Question 10

2 and 3

1 and 3

3 and 2

None of the above

Solution

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I - False

II - False

III - True

I - False

II - True

III - True

I - True

II - False

III - True

I - False

II - True

III - False

i - A

ii - A

iii - A

iv - A

i - D

ii - D

iii - D

iv - D

i - A

ii - D

iii - A

iv - D

i - D

ii - A

iii - D

iv - A