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Steps involved in Establishing Business Test 13

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Steps involved in Establishing Business Test 13
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Weekly Quiz Competition
  • Question 1
    1 / -0
    A partner can transfer his share to an outsider ________.
    Solution
    According to the provisions of the Indian Partnership Act, 1932, all the partners are obliged to follow certain rules and regulations and one such rule is that a partner is not allowed to transfer his share to an outsider without the consent of other partners.
  • Question 2
    1 / -0
    A florist opened a shop in the year 2000 but due to certain losses he did wind it up in a single day after 9 years of operation i.e. in 2009. What kind of organization it is _________.
    Solution
    In the given case, shop was opened by a single person and was wound by himself only. That means the shop was owned, controlled and managed by the single person and the loss was also borne by him. In sole proprietorship, the business is owned and managed by single person. Hence, it is sole proprietorship type of organization.
  • Question 3
    1 / -0
    The most suitable definition of a sole trader form of business organization is _______.
    Solution
    A sole trading concern is a business which is owned and managed by a single person. He is the only risk taker in the business and the profit is enjoyed by himself only. Hence, the most suitable definition of a sole trader form of business organization is the business is owned by one person.
  • Question 4
    1 / -0
    In relation to business organisation structure, which one of the following is easy to form and wind up?
    Solution
    A sole proprietorship business requires only one person, less capital to set up. It requires very less legal formalities to establish the business as compare to a company, statutory corporation. public enterprises. Hence, sole proprietorship is easy to form and wind up.
  • Question 5
    1 / -0
    Whenever a new partner is added to the firm the firm is _______.
    Solution
    When a new partner joins a partnership the old partnership is dissolved and a new partnership is formed. Accounting for the admission of a new partners depends on the nature of the arrangement between the existing partners and the new partners. And the new partner contributes according to the agreement.
    Hence, option (A) is the correct answer.
  • Question 6
    1 / -0
    Which of the following statement is incorrect?
  • Question 7
    1 / -0
    _____________ is a feature of partnership form of business.
    Solution
    Partnership form of business main features are:
    Ease of formation is its most important feature because it is not required to go through elaborate legal formalities. No agreement is to be made and registration of the firm is also not essential. However, the owner may be required to obtain a license specific to the line of business from the local administration. The firm has no legal existence separate from its owner. 

    The capital required by the organisation is supplied wholly by the owner himself and he depends largely on his own savings and profits of his business. Owner alone enjoys the benefits or profits of the business and he alone bears the losses.

    The liability of the proprietor is unlimited i.e. it extends beyond the capital invested in the firm. Owner has a complete control over all the aspects of his business and it is he who takes all the decisions though he may engage the services of a few others to carry out the day-to-day activities. The formation and operation of a sole proprietorship form of business organisation requires almost no legal formalities.The legal claimants can pursue the personal property of the proprietor and not simply the assets used in the business.
  • Question 8
    1 / -0
    Which one of the following does not have perpetual succession?
    Solution
    Perpetual succession means continuous without any stoppage. In case of a sole proprietorship there is only one person and the business comes to and end if the owner dies because he is the only owner. Hence, sole proprietorship does not have perpetual succession.
  • Question 9
    1 / -0
    Mr. Varun wanted to start a bakery shop with limited money. What kind of business organization you would suggest him?
    Solution
    A sole proprietorship is a business which is owned and managed by a single person. It consists of limited capital as there is only one person. Hence, it is a sole proprietorship form of business organization.
  • Question 10
    1 / -0
    Which of the following people cannot be called partners?
    Solution
    Indian Partnership Act provides that though a minor cannot be a partner in a firm, with the consent of all the partners for the time, he may be admitted to the benefits of the partnership by an agreement executed through his guardian with the other partners.
    Insolvency means a person who is not able to pay their debts. So he cannot be a partner of a partnership firm. No member can be a partner without an agreement between co-owners.
    Hence, option (D) is the correct answer.
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