Steps involved in Establishing Business Test 19

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Steps involved in Establishing Business Test 19

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Weekly Quiz Competition

Question 1
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 2
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 3
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 4
1 / -0

Which of the following is/are advantage of LLP?

A
Personal assets of the partners are liable in all cases.

B
Much more difficult to dissolve or wind up

C
No requirement to maintain statutory records except books of account

D
All of above

Solution

The LLP is compulsorily required to maintain proper books of accounts relating to its affairs for each year on cash basis or accrual basis and shall maintain the same at its registered office for eight years from the date on which they are made but there is no requirement to maintain statutory records, its an advantage of the LLP.
Thus the correct answer is C.
Question 5
1 / -0

When firm successfully engages in mergers and acquisitions it is called _________.

A
Expansion

B
Growth and expansion

C
Business planning

D
Modernization

Solution

The mergers and acquisitions (M&A) refer to the process of one company combining with one another to making a big entity. In an acquisition, one company purchases the other outright. A merger is the combination of two firms, which subsequently form a new legal entity with the purpose of expansion of the business.
Thus the correct answer is A.
Question 6
1 / -0

How partners are liable for the debts and obligations of the firm?
(i) Jointly
(ii) Severally
Select the correct answer from the options given below:

A
i only

B
ii only

C
Both i and ii

D
Neither i nor ii

Solution

Partners are jointly and severally liable for the debts and obligations of the firm. Both the options are correct because in unlimited partnership, every partner is liable, jointly with all the other partners and also severally, for all acts of the firm done by them. The Partners will be held personally responsible for another partner's carelessness.
Thus the correct answer is C.
Question 7
1 / -0

Common examples for non profit corporations are __________________.

A
Educations corporations

B
Charitable corporations

C
Religious corporations

D
All of above

Solution

Common examples for non-profit corporations are:
1.Educations corporations
2. Charitable corporations
3. Religious corporations
All these types of corporations work for the benefit of the general public instead of making a profit they work for social welfare.
Thus the correct answer is D.
Question 8
1 / -0

Which of the following is/are disadvantage of partnership firm?

A
Unlimited Liability of partners.

B
The duration of the partnership is always uncertain.

C
The partners should be like minded, have a common objective, be large hearted, have a cool temperament should not unnecessarily cause friction and confusion among the partners.

D
All of above

Solution

The following are the disadvantages of Partnership Firm:
1. The Liability of partners is an unlimited liability.
2. Uncertainty of partnership
3.The partners should be like-minded, have a common objective, be large-hearted, have a cool temperament should not unnecessarily cause friction and confusion among the partners.
So all the above are the disadvantages of the LLP.
Question 9
1 / -0

A minimum of ____________ are required to start a partnership business.

A
Five persons

B
Four persons

C
Three persons

D
Two persons

Solution

A minimum of two persons is required to start a partnership business. As per the Partnership Act, there must be an association of two or more persons, this statement is true, it is a legal form of business operation between two or more individuals who share management and profits. All members share both profits and liabilities equally and the individuals are personally responsible for the debts of the partnership.
Thus the correct answer is D.
Question 10
1 / -0

Which of the following is/are advantage of LLP?

A
Perpetual existence

B
Internationally renowned from of business in comparison to Company

C
No requirement of minimum capital contribution

D
All of above

Solution

Limited liability partnership is a mix of both partnership and corporation. It has the feature of both these forms. The following are the advantages of the LLP:
1. No minimum capital requirement.
2. No limit on owners of business.
3. Lower Registration Cost, etc.
Thus the correct answer is D.

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Steps involved in Establishing Business Test 19

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Steps involved in Establishing Business Test 19

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Question 1

1 and 4 only

2, 3, 4

2 and 1 only

4, 2 and 1

Solution

Question 2

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 3

i - Aii - Aiii - Aiv - A

i - Dii - Diii - Div - D

i - Aii - Diii - Aiv - D

i - Dii - Aiii - Div - A

Solution

Question 4

Personal assets of the partners are liable in all cases.

Much more difficult to dissolve or wind up

No requirement to maintain statutory records except books of account

All of above

Solution

Question 5

Expansion

Growth and expansion

Business planning

Modernization

Solution

Question 6

i only

ii only

Both i and ii

Neither i nor ii

Solution

Question 7

Educations corporations

Charitable corporations

Religious corporations

All of above

Solution

Question 8

Unlimited Liability of partners.

The duration of the partnership is always uncertain.

The partners should be like minded, have a common objective, be large hearted, have a cool temperament should not unnecessarily cause friction and confusion among the partners.

All of above

Solution

Question 9

Five persons

Four persons

Three persons

Two persons

Solution

Question 10

Perpetual existence

Internationally renowned from of business in comparison to Company

No requirement of minimum capital contribution

All of above

Solution

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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