Steps involved in Establishing Business Test 36

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Steps involved in Establishing Business Test 36

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Question 1
1 / -0

Tick mark the correct answer.
Test-checking implies checking_________________ .

A
Each and every item

B
A representative sample of items

C
Only a few items in detail

D
Random items

Solution

Test-checking implies checking a representative sample of items The items which are checked during test-checking usually represents each and very items' features. Test checking helps to evaluate the quality of the items. It involves checking a sample of items randomly.
Question 2
1 / -0

Which of the following statement is correct?

A
Partners are the agents of the firm but member of company are not its agents

B
Partner cannot contract with his firm but a member of a company can

C
Both (a) and (b)

D
None of these is correct

Solution

Persons who have entered into a partnership with one another are called individually "partners". Following statements are correct:
a) Partners are the agents of the firm but member of company are not its agents
b) Partner cannot contract with his firm but a member of a company can.
Question 3
1 / -0

The liability of sole proprietor is

A
Limited to the extent of his capital invested

B
Limited to the extent of the value of his business assets

C
Limited to the extent of the value of his business assets and all his private estates

D
Limited to the extent of his profit earned

Solution

Sole proprietors have unlimited liability. This implies that the owner is personally responsible for payment of debts in case the assets of the business are not sufficient to meet all the debts. As such the owner’s personal possessions such as his/her personal car and other assets could be sold for repaying the debt.
Question 4
1 / -0

Office work is likely to be found concentrated in a _____organisation.

A
Functional

B
Centralised

C
Decentralised

D
Bureaucratic

Solution

Option B is the correct answer.
Question 5
1 / -0

How may a partnership come into existence?

A
By inheritance of property

B
By the operation of law

C
By an expressed agreement only

D
By an expressed or implied agreement

Solution

Option D is the correct answer.
Question 6
1 / -0

Which of the following is the test of the long-term liquidity of a business?

A
Current ratio

B
Operating ratio

C
Stock turnover ratio

D
Interest coverage ratio

Solution

Interest coverage ratio is the test of the long-term liquidity of a business. Interest coverage ratio can be defined as the ratio which helps to determine how easily a company can pay the interest on its outstanding debt. Interest coverage ratio is a type of debt ratio.
Question 7
1 / -0

The individual proprietorship form of business is not advisable for enterprises that

A
Require small capital

B
Need personalised attention to customers

C
Do not involve heavy risk

D
Are large in size

Solution

Sole proprietorship is a business that suits the ones who wants to carry out the business on smaller scale.
Question 8
1 / -0

Tick mark the correct answer.
A firm has these characteristics: it is involved in the manufacture of custom built machinery, its products have shorter life span, the products are processed through different specialists, and the products have a rigid time schedule to be met. In such a circumstance, which one of the following would be the form of organisation best suited to achieve the objectives?

A
Functional organisation

B
Line and Staff organisation

C
Project (Matrix) organisation

D
Line organisation

Solution

Option C is the correct answer.
Question 9
1 / -0

The partnership entity may be regarded as

A
A legal entity

B
An accountable entity

C
Both a legal and accountable entity

D
Neither a legal nor an accountable entity

Solution

Option D is the correct answer.
Question 10
1 / -0

The features of partnership is

A
Sharing of profits

B
Unlimited liablity

C
Implied agency to partners

D
All of the above

Solution

Option D is the correct answer.

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Re-Attempt Weekly Quiz Competition

Steps involved in Establishing Business Test 36

Result

Steps involved in Establishing Business Test 36

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SHARING IS CARING

Question 1

Each and every item

A representative sample of items

Only a few items in detail

Random items

Solution

Question 2

Partners are the agents of the firm but member of company are not its agents

Partner cannot contract with his firm but a member of a company can

Both (a) and (b)

None of these is correct

Solution

Question 3

Limited to the extent of his capital invested

Limited to the extent of the value of his business assets

Limited to the extent of the value of his business assets and all his private estates

Limited to the extent of his profit earned

Solution

Question 4

Functional

Centralised

Decentralised

Bureaucratic

Solution

Question 5

By inheritance of property

By the operation of law

By an expressed agreement only

By an expressed or implied agreement

Solution

Question 6

Current ratio

Operating ratio

Stock turnover ratio

Interest coverage ratio

Solution

Question 7

Require small capital

Need personalised attention to customers

Do not involve heavy risk

Are large in size

Solution

Question 8

Functional organisation

Line and Staff organisation

Project (Matrix) organisation

Line organisation

Solution

Question 9

A legal entity

An accountable entity

Both a legal and accountable entity

Neither a legal nor an accountable entity

Solution

Question 10

Sharing of profits

Unlimited liablity

Implied agency to partners

All of the above

Solution

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