WorksheetsCA foundation ch 1
Total questions: 76
Worksheet time: 38mins
The possibilities of inadequate profits or even losses due to uncertainties are known as
Business Contingencies
Business Risks
Business Ventures
Business Activity
Name two broad categories of business activities
Trade and Commerce
Trade and Industry
Industry and Commerce
None of these
Commerce includes activities relating to trade and ______ to trade
Supporting
Subsidiaries
Auxiliaries
Assistance
Earning of profit is considered to be the subsidiary objective of the business.
True
False
Transfer of interest exists in case of ______
Profession
Employment
Business
None of these
Which of the following is not a part of non-economic activity?
Patriotism
Teaching
Sentiment
Sympathy
Rendering of personalized expert service is a part of _____
Business
Profession
Employment
Global Firms
The main purpose of economic activities is ______
To earn less profit
To provide free services
To earn more and more profit
To avoid loss
Which of the following is an economic activity?
Social activities
Patriotic activities
Profession
Religious activities
Which of the following is not a characteristic of business?
economic activity
regularity of dealing
creation of utilities
certainty of return
Which of the following is not concerned with profession?
specialized body of knowledge
code of conduct
transfer of interest
formal training
______ is an economic activity.
Non-employment
Employment
Non-profit organization
Charity
"Business of traditional items has a high degree of risk than a business of fashionable items."
True
False
Trade is an essential part of commerce. It refers to _____
small business
profession
sale, transfer or exchange of goods
services
Which feature of a company states that the existence of a company is not affected by the coming and going of the members?
Limited Liability
Common Seal
Separate Identity
Perpetual Succession
Tea is mainly produced in Assam; Cotton in Gujarat and Maharashtra; Jute in West Bengal and Orissa. But these goods are required for consumption in different parts of the country. For this purpose, _____ is very important.
Advertising
Insurance
Banking
Transportation
Commerce provides the necessary link between ______ and ______
Market and Distributor
Producer and Retailer
Producer and Consumer
Primary and Secondary Industry
_____ is used as a measure of efficiency.
Innovation
Productivity
Employee Turnover
All of these
The best definition of a sole trader from of business organization is _____
The business only employs one person.
The business is owned by one person.
The firm has a single customer.
There is a single firm in the industry.
One of the claimed advantages of a sole trader business is that ______
Owners have limited liability.
Shares can be sold to raise capital.
Decisions and responsibilities can be shared.
The owner has independence.
One of the disadvantages of a sole trader business is that _____
Capital is limited to owner's savings and bank loans.
Decisions take too long to make.
As they are government owned there is no profit motive.
The owners may disagree.
One of the advantages of a partnership form of business organization is that _____
All partners have limited liability.
Shares can be sold on stock exchange.
The business survives the death of the partner.
The business can make better decisions.
Which of the following is Not a feature of private limited company?
Shares can be issued to raise capital.
Shares can be bought and sold on the Stock Exchange.
All owners of the business have limited liability.
The business continues after the death of shareholders.
Which of the following statements best applies to a public limited company?
It is owned by the government and it is in the public sector.
It is owned by shareholders who can sell their shares on the Stock Exchange.
It is quick and easy to set up with few legal formalities.
Its accounts can be kept private and it received little coverage in the business.
The main reason why the owners of many private limited companies convert into public limited companies is because ______.
They do not want to remain in the private sector.
They want to gain the benefits of limited liability.
They want to keep the annual accounts secret.
They want to raise additional capital to expand the business.
One of the main drawbacks of many public limited companies is that:
There can be a loss of control by the original owners as additional shares are sold.
Firms in the public sector are often less efficient.
If the company were to fail the shareholders could lose all of their assets.
Workers have to be asked for their opinions before major decisions are taken.
Which of the following statements about most public limited companies is true?
They are owned and controlled by the workers.
They are owned by the directors but controlled by the shareholders.
They are owned by shareholders but controlled by directors.
They are owned and controlled by the government
One of the reasons for a business buying a franchise is because:
It is always much cheaper than setting up a new business venture.
There is complete control over important decisions.
The business can use its own name in advertisements.
The risks of failure are lower as it is buying a well-known business idea.
One of the advantages to a business of selling a franchise is that:
The business can expand more quickly.
The franchisor owns all of the shops.
The businesses buying the franchises are certain to be successful.
The product sold in each shop will be different.
What kind of business is best described by the following statements?
I am the only owner of my business.
I take all the risks of doing the business and keep all the profits.
Partnership
Cooperative
Company
Sole Proprietorship
A form of business organization that is authorized to act as a legal entity regardless of the number of owners.
Company
Proprietorship
Partnership
Distributor
What is a disadvantage of partnership?
Ease of formation
Owners share responsibilities
Limited liability
Possibility of conflicts
What is the advantage of a company?
Minimal government regulation
Limited liability
Short life span
Has one owner
What are the disadvantages of a partnership?
Partnership must be reorganized if one partner quits
Partners share unlimited liability
Partners may not get along
All of these are correct
"Companies do not continue when shareholders sell stock."
True
False
Owned by many people but treated by law as one person ______
Partnership
Cooperative
Company
Sole proprietorship
Which of the following does not characterize business activity?
Production of goods and services
Presence of risk
Sale or exchange of goods and services
Salary or wages
Which of the following cannot be classified as an auxiliary to trade?
Mining
Insurance
Warehousing
Transport
The occupation in which people work for others and get remunerated in return is known as ______
Business
Profession
Employment
None
Which of the following cannot be classified as an objective of business?
Investment
Productivity
Innovation
Profit Earning
Business risk is not likely to arise due to ______
Changes in government policy
Good management
Employee dishonesty
Power failure
Which of the following is false?
A private company is treated as a public company when it is a subsidiary of public company.
Hindu Succession Act, 1956 deals with HUF.
There is no effective control in HUF.
Partnership is registered under Indian Partnership Act, 1932.
It is not compulsory to register limited liability partnership.
True
False
There is restriction on transfer of shares in a private limited company.
True
False
Everyone is one way or the other affected by business because:
People work in a business environment
People buy goods produced by businesses
Business caters to demands of the customers
All of the above
Which of the following is not a hard commodity?
(Hard commodity is the one which is mined or extracted)
Gold
Rubber
Oil
Pork
Which of the following is not a soft commodity?
(Soft commodities are agricultural products or livestock)
Diamond
Wheat
Sugar
Corn
Which of the following is a stakeholder of a company?
Society
Suppliers
Supporting organizations
All of the above
Which of the following is not an economic objective of the firm?
Sales growth
Improvement in market share
Profits and return on investment
Conservation of natural resources
Which of the following statements describes the best Joint Hindu/ Hindu Undivided Family(HUF) business?
It is a form of business particular to and recognized as such in India
Every family business is in fact an HUF business
In HUF, there is family involvement in business
Either a or c
Which of the following statements does not comprise economic activity?
Sale of old furniture by a household for a profit
A carpenter made furniture for its domestic use
Steel furniture industry
Domestic appliances industry
Trading implies buying for the purposes of selling. Applying this criterion, tell which of the following activities would not qualify as trading?
Purchase of goods in bulk quantity from the manufacturer and sale in small quantities to the retailers
Buying from the wholesaler and selling it to the consumers.
Buying from the retailer for self-consumption
Purchase of raw materials from the suppliers for further processing in the factory
Sustainable develoment/ businesses imply:
Consistent economic performance
Attention to social problems
Harmony with nature
All of the above
Which of the following statements characterizes the best non-economic activities?
Non-economic activities do not require any investment of resources
These activities do not entail any operational costs
These activities are undertaken by ascetics
The underlying purpose of these activities is not earning of a livelihood but social, psychological or spiritual satisfaction
The Indian Companies Act provides for the registration of:
Private limited and public company
One person company and small company
Dormant or defunct company
All of the above
There cannot be partnership between:
Natural persons
Partnership firms
Artificial persons
Any combination of natural and artificial persons
HUF cannot comprise members of a:
Hindu and Sikh family
Parsi family
Buddhist family
Muslim family
An HUF is a body corporate.
True
False
A public company is exempted from constituting certain mandatory committees of the board of directors.
True
False
The feature of limited liability for business owings is a principal advantage of the corporate form of organization.
True
False
A shareholder cannot be personally held liable for the acts of the company even if he holds virtually the entire share capital.
True
False
Which of the following is false?
The written agreement which specifies the terms and conditions that govern the partnership is called partnership deed.
A private company needs to have 3 directors as against 2 in case of public.
Sole propritorship is the most preferred form of organization as far as flexibility is concerned.
Company the most preferred form of organization as far as availability of capital is concerned.
Which of the following is false?
No minimum qualification is required for doing business.
There is no separate legal identity i.e owner and business are the same in sole proprietorship.
In sole proprietorship, liability of the owner is unlimited.
Cooperative society is considered most suitable from the point of view of investors.
There are restrictions on loans for private limited company.
True
False
Which of the following is false?
Company is preferred if professional services are required.
In partnership, members are jointly as well as individually liable for payment of debts.
A company can buy and sell properties, enter contracts, sue and can be sued in its own name.
A partnership business comes into existence only through partnership act.
In today's world, both earning of income as well as its _____ has increasingly become dependent on business and commerce.
Savings
Spending
Investment
All of these
Which of the following is an advantage of partnership over sole proprietorship?
More capital
Varied managerial skills
Sharing of risks
All of the above
Which form of business organization is preferred on the basis of cost and ease of formation?
Partnership
Sole Proprietorship
Cooperative Society
Company
Which form of business organization is best suited if the business needs a permanent structure?
Partnership
Sole Proprietorship
Cooperative Society
Company
Which economic activity involves no risk?
Business
Profession
Employment
All are same
Transfer of interest is possible in case of which economic activity?
Business
Profession
Employment
All are same
Give an example which is non-economic at one point and economic on the other? Pick the odd one out.
A lawyer fighting case of his clients and lawyer fighting his own son.
A doctor treating patients in his own clinic and in the hospital where he is employed.
A teacher teaching in a school and the same teacher teaching her own son.
A CA auditing his client's firm and a CA auditing his father's firm.
How can business firms increase their productivity?
By increasing sales volume
By giving more salary to employees
By the best use of available resources
None of these
Factors that can lead to closure of sole proprietor business are:
Death
Insanity
Insolvency
All of these
What are the basic requirements for the formation of a Hindu Undivided Family business?
At least three members and ancestral property.
At least two friends and ancestral property.
At least two members and rural property.
At least two members and ancestral property.
Which of the following is true?
In LLP, the liability of at least one partner is limited.
In HUF, the coparceners are unrelated to karta.
A public company can have unlimited shareholders.
The liability of the members of a private company is unlimited.
