Steps involved in Establishing Business Test 17

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Steps involved in Establishing Business Test 17

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Weekly Quiz Competition

Question 1
1 / -0

It is NOT UNCOMMON in partnership firm _______________.

A
Co-owner can ask for the division of property

B
Co-owner can transfer his rights without the consult of others

C
Co-owner has no lien on property of business

D
All of the above

Solution

Option D is the correct answer.
Question 2
1 / -0

An idea of operating as a partnership would include _________.

A
greater power than a sole trader for decision-making

B
being able to raise capital through share issues

C
access to large amount of initial capital

D
limited liability for all partners

Solution

Option C is the correct answer.
Question 3
1 / -0

When advising John of what to include in the production plan of his business plan for his entrepreneurial venture, what would you not include in you recommendation?

A
Manufacturing process

B
Product price

C
Names of suppliers of raw materials

D
Physical plant

Solution

The administrative process that takes place within a manufacturing business and which involves making sure that sufficient raw materials, staff, and other necessary items are procured and ready to create finished products according to the schedule specified in the production planning plan, the focus is on inputs and process, i.e., plant and machinery used, material to be used, suppliers details, the process of manufacturing.
Hence, option B is correct.
Question 4
1 / -0

A partner who is entitled to share in the profits of a partnership firm without being liable to the losses, is called ___________.

A
Partner in profits only

B
Sleeping partner

C
Active partner

D
Dummy partner

Solution

A partner sharing the profits of the business without making himself responsible for losses, if any, is known as a partner in profits only. He contributes capital and is also liable to third parties like other partners. Such partners are not allowed to take part in the management and administration of the business.
Hence, option (A) is the correct answer.
Question 5
1 / -0

Which of the following are the rights of a partner in a partnership firm?
X. To take art in the conduct and management of the business.
Y. To receive remuneration for active working in the firm.
Z. To receive interest on the capital invested in the firm W. To receive share in the profit.
Correct option is _______________.

A
X and Y

B
X and Z

C
X and W

D
X,Z and W

Solution

In the partnership, the partners enter into a partnership deed which generally defines all the rights and responsibilities of partners. The following are the rights of a partner in a partnership firm:
1. To take part in the conduct and management of the business.
2. To receive interest on the capital invested in the firm
3. To receive a share in the profit.
4. Accessing the books of accounts
5. Indemnification rights etc
Thus the correct answer id D.
Question 6
1 / -0

The relationship of partnership arises out of _________.

A
an agreement

B
statute

C
operation of law

D
both an agreement and statute

Solution

The relationship of partnership arises out of an agreement or deed. The written agreement of partnership is called a partnership deed. It is a contract between two or more individuals who decide 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.
Question 7
1 / -0

Transfer of share in the partnership firm is _____________.

A
restricted

B
freely transferable

C
prohibited

D
none of these

Solution

A partnership firm, is not a legal person and hence cannot be a shareholder of a company however they can not issue shares to the public and if there are no share, transfer of shares is also not possible but the firm can purchase shares of a company in the individual names of its partners.
Thus the correct answer is A.
Question 8
1 / -0

In which of the following cases a partnership firm is re-constituted?

A
Admission

B
Retirement

C
Death

D
All of the above

Solution

The Partnership will be reconstituted if the following cases occur in a firm:
1. Admission of a new partner
2. Retirement of a partner
3. Expulsion of any partner
4. Death of a partner
5. Insolvency of a partner
6. Transfer of share of a partner
Thus the correct answer is D.
Question 9
1 / -0

A partner who does not get actively involved in business is a _________ partner.

A
active

B
sleeping or dormant

C
nominal

D
sub-partner

Solution

Sleeping Partner or Dormant partner - A sleeping partner is a partnership business who does not play an active role, especially one who supplies capital and whose association with the enterprise is not public knowledge. He has share in profit and loss of business.
Question 10
1 / -0

True Test of existence of partnership is _________.

A
mutual agency

B
sharing of profits

C
sharing of osses

D
all of the above

Solution

The true test of partnership is mutual agency which means the existence of a Mutual Agency relationship, i.e. the capacity of a partner to bind other partners by his acts done in the firm’s name and also bound by the acts of other partners. In partnership sharing of profit is an important element of partnership but it is not a conclusive proof of partnership.
Thus the Correct answer is A.

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Steps involved in Establishing Business Test 17

Result

Steps involved in Establishing Business Test 17

Score

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SHARING IS CARING

Question 1

Co-owner can ask for the division of property

Co-owner can transfer his rights without the consult of others

Co-owner has no lien on property of business

All of the above

Solution

Question 2

greater power than a sole trader for decision-making

being able to raise capital through share issues

access to large amount of initial capital

limited liability for all partners

Solution

Question 3

Manufacturing process

Product price

Names of suppliers of raw materials

Physical plant

Solution

Question 4

Partner in profits only

Sleeping partner

Active partner

Dummy partner

Solution

Question 5

X and Y

X and Z

X and W

X,Z and W

Solution

Question 6

an agreement

statute

operation of law

both an agreement and statute

Solution

Question 7

restricted

freely transferable

prohibited

none of these

Solution

Question 8

Admission

Retirement

Death

All of the above

Solution

Question 9

active

sleeping or dormant

nominal

sub-partner

Solution

Question 10

mutual agency

sharing of profits

sharing of osses

all of the above

Solution

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