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WorksheetsGrade 10 EM - 1st Term Test
Total questions: 117
Worksheet time: 1hrs 26mins
If A Business Finds Difficulties in A Adopting to New Technologies It Is A
Strength.
Weakness.
Opportunity.
Threats.
While the … of the business are interested in the safety of the investment, the … are interested in obtaining a reasonable salary
Competitors, Employees
Owners, Suppliers
Employees, Customers
Owners, Employees
According to The Nature of the Product Produced Organizations Could Be Categorized As (1) ------- And (2) -------- Select The Most Suitable Answer for (1) And (2)
(I) Profitable Businesses and Non-Profitable Businesses
(II) Profit Oriented Businesses and Non for Profit Businesses
(III) Private Sector Businesses and Service Providing Businesses
(IV) Commodity Production and Service Providing Businesses
I
II
III
IV
Mr. Sarangan who lived in Jaffna cultivates the fruits and produces fruit drinks. He conducts fruit drinks selling business nearest New Bus Stand he can earn more profit and increase his sales due to the drought. Therefore, he expects to convert his business to the incorporated company. The leading leasing company comes forward to issue new machinery at a low rate of interest. The low rate of interest is included in the
Economic Environment
Technological Environment
Legal Environment
Global Environment
Using Following Case Answer Question
Mr. Jayasinghe Commenced a Rice Selling Business, Which He Buys Paddy from His Area and Converts Them into Rice. One of His Friend Mr. Kulasinghe Has Been Recruited as an Employee of This Business and The Business Named as "Singhe PLC".
Select the type of business organization which 'Singhe PLC' relates to?
Sole Proprietorship
Partnerships
Incorporated Companies
Cooperative Societies
The Answer Which Includes a Threat and Weakness Respectively That Can Be Identified by Studying Business Environment.
Tax Increased, Dedicated Workers.
Financial Crisis, New Competitors.
Untrained Workers, New Competitors.
New Competitors, Untrained Workers.
Mr. Sarangan who lived in Jaffna cultivates the fruits and produces fruit drinks. He conducts fruit drinks selling business nearest New Bus Stand he can earn more profit and increase his sales due to the drought. Therefore, he expects to convert his business to the incorporated company. The leading leasing company comes forward to issue new machinery at a low rate of interest. Sarangan business is incorporated as a incorporated company under the law of
Shop and Office Employee Act No.14 Of 1954
Business Name Ordinance Act No 6 Of 1918
Company Act No 07 Of 2007
Consumer Affairs Authority Act No. 09 Of 2003
Select The Correct Answer by Referring the Following Statements
A- The Geographical Location of the business is unfavorable
B- Difficulty in Adoption to New Technology
C- Imposition of International Trade Embargoes
Which One of the Above Can Be Considered as A Weakness of a Business?
Only A
Only B
Only A and B
Only A and C
Select The Most Suitable Statement Which Describes the Business Environment Correctly
(I) The Internal and The External Environment of the Business
(Ii) The Environment Which Directly Influences the Business
(Iii) The Environment Which Indirectly Influences the Business
(Iv) The Environment in Which the Factors Affecting Businesses Are Activated
I
II
III
IV
What Is the Basis of Exchanging Goods and Services?
Direct Production
Indirect Production
Surplus Production
Barter System.
Objective of … is to perform management decision to achieve the objectives of business. While … are the stakeholders who obtain a quality product at a reasonable price. Select the correct answer suitable for blank 1 and 2 respectively
Competitors, Employees
Owners, Customers
Manager, Customers
Employees, Customers
Mr. Sarangan who lived in Jaffna cultivates the fruits and produces fruit drinks. He conducts fruit drinks selling business nearest New Bus Stand he can earn more profit and increase his sales due to the drought. Therefore, he expects to convert his business to the incorporated company. The leading leasing company comes forward to issue new machinery at a low rate of interest. Opportunity for the Sarangan?
He has own fruit estate
Expected to convert as incorporated company
Located nearest the bus stand
Experience in preparing fruit juice
Which One of the Following Can Be Considered as Production Factor?
(I) All The Resources Gifted by Nature
(Ii) Resources Required to Produce Goods and Services
(Iii) Labour, Land, Buildings, And Machinery and Equipment
(Iv) The Business Methods of Capital Intensive and Labour Intensive
I
II
III
IV
A Factor Which Represents the Economic Environment of a Business Is,
(I) Government Rules Regulations and Acts
(II) A Decline in The Interest Rate
(III) A Growth in The Transportation Industry
(IV) An Improvement in Computer Technology
I
II
III
IV
The Answer That Includes Only the Factors of External Environment,
Owner, Manager, Employee.
Owners, Manager, Consumer.
Supplier, Customer, Future, Investor.
Employee, Customer, Consumer.
Following X and Y Columns Represent Factors of Production and Examples of Them.
X Y
1. Labour A- Owner
2. Capital B- Security Guard
3. Entrepreneur C- Buildings
4. Land D- Light
Select The Correct Answer When X and Y Are Matched Together
(I) 1-A, 2-B 3-C 4- D (II) 1-B 2-C 3-A 4-D (III) 1-D 2-B 3-D 4-C (IV) 1-C 2-D 3-C 4-A
I
II
III
IV
Choose The Answer That Includes Only the Variables of the Economic Environment.
Interest Rate, Inflation, Nanotechnology.
Inflation, Exchange Rate, Income Distribution.
Income, Employment, Fiscal Policy.
Company Low, Vat, Fiscal, Policy.
Every Business Is Trying to Achieve a Specific Goal or Goals. The Major Reason Is,
(I) To Give a Return On the Investments
(Ii) In The Absence of Objective It Is Difficult to Reach the Aim
(Iii) The Objectives Help to Increase the Customer Satisfaction
(Iv) It Is Essential to Give Benefits to The Stakeholders
I
II
III
IV
A Strength to A Business Is
(I) Providing Loans by The Government at A Lower Interest Rate
(II) An Adequate Capital
(III) A Favourable Foreign Exchange Rate
(IV) A Decrease in The Inflation Rate
I
II
III
IV
It Is Not a Feature of Services.
Being Able to Store.
Being Invisible
Variation of Quality According to Supplier.
Getting Discharged After One Is Used.
Different Parties and Forces Operating Within a Business and Affecting Business Are Known As.............. Environment.
Business
Internal
External
Global
The Criteria Which Is Not Considered When Classifying Business Organization Based On Scale Is,
Amount of Capital Invested.
Profits Gained by The Business.
No. Of Employees.
Market Share of the Business.
A Common Feature in Any Business Organization Is
Legal Personality.
Having an Objective
Limited Liability
Keeping Accounting System.
The Board of Directors of an Incorporated Company Is Formed from.
Stake Holders.
Shareholders.
Partners.
Government.
Which of The Following Organizations Managed by Board of Directors Are
Incorporated Company Cooperative Society, State Cooperation.
State Department State Cooperation, Partnership.
Incorporated Companies’ Cooperative Society, Department.
State Company, Department State Cooperation.
The Appropriate Act for The Formation of a State Cooperation Is
The General and Special Act Formed at Parliament
Company Act No 07 Of 2007.
General Act Formed at Parliament.
Treasury and Finance Minister.
Legal Personality Means
The ability to speak in legal proceedings
The right to privacy under the law
The ability to serve on a jury
Recognition of an entity as having rights and obligations similar to those of a natural person
The Written Partnership Agreement Known as
Memorandum of Understanding
Charter
Partnership Deed
Deed of Trust
Select The Answer Which Indicates the Examples for Human Needs Only.
Food, School, Shelter
Health, Shelter, Internet
Communication, Food, Shelter
Food, Shelter, Uniforms
Select The Incorrect Statement.
The Institution Which Manufactures and Provides Different Goods and Services Are Called as Businesses.
Earning Profits Is the Main Objective of Every Business.
Wants Are the Different Ways of Satisfying Needs.
Physical Existing Things Which Are Used to Fulfil Human Needs and Wants Are Called as Goods.
.............1............ Are Intend to Secure Their Investment and .............2............ Are Intend to Receive a Fair Salary. The Correct Answer for Above Blanks 1 & 2 Respectively Is.
Competitors, Employees
Suppliers, Employees
Owners. Suppliers
Owners. Employees
Following Are Some Incidents Occurred in The Business Environment.
(A) It Is Indicated New Tax Amendments Relates to Domestic Potatoes On Current Budget Proposals.
(B) Interest Rates On Bank Deposits Are Increased by 2%.
(C) A New Act Was Passed Relates to Protect the Environment for The Pollution of Polythene.
Select The Incidents Which Are Related to Political Environment Only.
A & B Only
A Only
A & C Only
C Only
The Incident Which Is Not Related to "Providing Infrastructure Facilities"
Laying The Foundation for The New Entrance Point of the Central Express Way.
A New Water Project Was Started for Rajarata Dry Zones.
Introducing A Boat Service for Passengers Across the Cannels of Bere Lake.
Introducing The Tele Mail Service Instead of the Telegram Service of the Postal Service.
Select A Factor Which Is Related to The External Environment.
Managers
Owners
Technology
Employees
It Is Increased the Interest Rates for Bank Deposits Subject to The Advices of the Central Bank of Sri Lanka. Above Statement Relates to,
Technical Environment.
Economic Environment.
Legal Environment.
Political Environment.
It Is Not an Example for Technological Environment.
Using Modern Machines Instead of the Simple Manual Machines.
Using E - Mail Instead of Snail Mail.
Using Computer Information Systems Instead of the Manual Accounting Books.
Constructing Highways by The Government Instead of the Normal Roads.
Technological Environment Is Called As
The Usage of New Technological Instruments.
The Usage of New Machines.
The Usage of New Methods and New Innovations.
All Above Reasons
As A Factor of Economic Environment the Income Distribution Is Called as,
How The National Income of a Country Has Been Distributed Among Its People.
The Difference of the Distribution of Income.
How The Income Earned by Each Individual
The Way of Distribution of the Personal Income
Globalization Facilitates the Conduct of Business Activities Freely Without Any Cross Border. Globalization Is,
Removing Any Cross Boarders and Any Other Restrictions.
Advancement in Information and Communication Technology.
The Mutual Relationship Among Countries in Terms of Economic, Social and Cultural Dimensions.
The World Locates Globally.
A Positive Impact from The Global Environment On Domestic Businesses Is,
Domestic Skilled Workers Migrating to Foreign Countries.
Creating A Highly Competitive Environment.
Inflow of Foreign Capital.
Impacts to The Local Culture.
A Negative Impact from The Global Environment On Domestic Businesses Is,
Instability of The Existence of Domestic Businesses.
Possibility to Find Foreign Markets for Domestic Goods and Services.
Possibility to Obtain Efficient Machines.
Possibility to Obtain Quality Raw Materials from Abroad.
Select The Correct Statements.
A. Reaching The Foreign Technology to The Market. The Domestic Business Is Being Developed.
B. As Globalization the Entire World Has Become a Global Village.
C. The Changes in Information and Communication Technology Are Always Affect To The Businesses
Positively.
D. As Globalization. It Is Increased the Distance Among People.
B & C Only
A & B Only.
A & D Only.
C & D Only
What Is Not a Criteria Used to Classify the Business Organizations.
Ownership
Objective
Legal Personality
Scale
The Business Organization Which Is Not Having a Legal Personality
Sri Lanka Rupavahini Corporation.
Sri Lanka Railway Department.
Sri Lanka Ports Authority.
Sri Lanka Bureau of Foreign Employment.
An Advantage of a Sole Proprietorship Is,
Easy to Commence.
Can Raise More Capital.
Can Take Collective Decisions.
Having A Legal Personality.
Select The Correct Statement Relates to State Corporations.
Should Be Incorporated Under the Companies Act.
Not Having a Legal Personality.
Can Take Independent Decisions.
Should Be Established Under a Parliament Act.
Select A Profit Motive Business Organization.
Corporative Societies
state Department
State Companies
Sport Associations
An Example for an Incorporated Company Is,
Samitha Perera Business
Silva and Company.
Randunu (Private) Ltd.
Ceylon Electricity Board.
what Is Not a Reason for Selecting Mostly as Small Scale Businesses by The Businessmen.
Ease of Starting with Less Capital.
Ease of Starting with Less Legal Influences.
Have The Ability to Influence the Respective Industry.
To Be Able to Make the Best Use of Their Skills.
what Is Not a Characteristic Can Be Seen in Cooperative Societies.
Having A Democratic Control
Collective Ownership of Members
Having Individual Expectations.
Voluntary and Open Membership
Select A Not for Profit Business
Incorporated Companies
Partnerships
State Companies
Cooperative Societies
Determining The Scale of a Business Depends On Several Factors. Out of Them the Major Factors Are,
Owners’ Financial Strength, Skills, Various Relationships, Experiences.
Owners’ Financial Strength, Number of Employees, Goods Produced, Various Relationships.
Goods and Services Produced, Market Share, Skills. Experiences.
Goods and Services Produced, Market Share, Skills, Owners’ Financial Strength.
Denushi Decided to Commence Her Business as ''Denushi Textiles." But She Is Inquiring You, Who Has the Authority to Set Relevant Fees for Registering the Business Name. The Correct Answer Is,
The Secretary of Relevant Divisional Secretariat Office.
The Grama Niladari of Relevant Division.
The Respective Provincial Council Within the Authority of Them.
The Business Name Registrar of the Relevant Provincial Council.
Supun Conducts a Business by Registering the Business as ''Supun Stores." what Is Not an Advantage of Registering the Business Name.
Receiving A Legal Personality.
Provides an Identity and Recognition
Provides A Qualification to Obtain Incentives Given by The Government.
Easy to Obtain Loans
A Characteristic, Which Can Be Seen in A Good
Intangible
Homogeneous
Cannot Be Separated from The Provider
Cannot Be Stored
What Is the Minimum Number of Members to Start a Cooperative Society?
20
02
15
10
The Business Organization That Can Raise Capital by Issuing Shares Is
Partnership
Sole Proprietorship
Incorporated Company
Association
Scale of Business Organization Depends On Different Criteria. Business Employee Less Than 25 Employees According to The Department of Census and Statistics Are Considered As
Partnership
Small and Medium Scale Business
State Companies
Large Scale Business
The Act That Defines the Maximum Number of Partners in A Partnership Is
Partnership Ordinance Act of 1890
Business Name Ordinance Act No.06 Of 1918
Prevention of Fraud Ordinance 1840
Companies Act No 07 Of 2007
Which Is the Business Organization That Is Operated with Profit Motive Under the Public Sector
Incorporated Companies
Co-Operative Societies
State Corporations
State Companies
A Characteristic That Can Be Seen in Incorporated Companies but Not in Sole Trader And
Partnership Is
Engaging in Economic Activity
Unlimited Liability
Having Legal Personality
No Continued Existence
The Business Organization Which Will Be Commenced Under A General Or Special Act Of The
Parliament Is
State Corporation
State Company
State Department
Co-Operative Society
What Is the Main Aim of the Accounting?
Fulfilling The Legal Requirement
Calculating The Profit Of The Business
Providing The Required Information For Stakeholders In The Business
To Calculate The Financial Position Of The Business
When The Man Has Become More Civilized His Wants and Needs Also Expanded. As A Result of Surplus in Production Goods Exchange System Was Introduced. The Major Reason for The Generation of Surplus in Production Was,
(I) The Availability of Excess Resources to Produce a Surplus
Ii) Producing Goods More Than Their Skills and Talents
(Iii) Expansion in Needs and Wants with The Development of Civilization
(Iv) Realizing That the Wants Could Be Fulfilled Through Exchanging
Select The Correct Answer Considering the Following Statements
(1) Some Private Businesses Perform Without the Objective of Profit Earning
(2) Most Businesses Perform Without the Objective of Profit Earning
First Statement Is Wrong but The Second Statement Is Correct
Both First and Second Statements Are Correct
Both The First and Second Statements Are Wrong
First Statement Is Correct but The Second Statement Is Wrong
Select The Correct Answer Based On the Following Two Statements
1. The Portion Which Is Not Spent On Consumption Is Savings
2. The Investment Level of a Country Will Decrease Due to The Increase in Savings
First and The Second Statements Are Wrong
First and The Second Statements Are Correct
First Statement Is Wrong but The Second Statement Is Correct
The First Statement Is Correct but The Second Statement Is Wrong
Which of The Following Is the Reason for The Popularity in Sole Proprietorship?
Can Be Started with A Small Capital
Registration Is Not a Mandatory
No Legal Personality Status
Profit and Loss Both Enjoy by The Owner Alone
What Benefit Could Be Enjoyed by The Owner by Registering the Business?
Exempted from Taxation
Receiving The Legal Personality Status
Receiving an Identity
Continuous Existence
The Business Organizations Are Categorized According to The Ownership as,
Profit Oriented and Non-for Profit Businesses
Small and Medium Scale Businesses
Private Sector and Government Sector Businesses
Small Scale and Large Scale Businesses
Select The Correct Statement Regarding the Liability of the Partners of a Partnership
Liability of The Partners Could Be Transferred to an Outsider
Liability Could Be Transferred to Another Person
Partners Are Collectively Bonded to The Liability
Partners Are Not Collectively Bonded to The Liability
The Act Which Relevant for The Registration of a Cooperative Society Is,
No 05 Of 1972
No 07 0f 2007
No 24 Of 1890
N0 06 Of 1918
In Which Business Organization, Owner, Manger The Leader Are the Same Person
Partnership
Sole Proprietorship
State Corporations
Cooperative Societies
Which One of the Following Is the correct Statement?
The Invention of Nano-Technology and The Digital Technology Were Cased for The
Improvement in Production Technology
Frequent Change in Consumers’ Living Pattern Will Be a Threat to The Business
By Analysing the External Environment, It Is Easier to Identify the Weaknesses Of
The Business
Facing to the Competition Is a Favourable Impact of Globalization
Mr. Sarangan Who Lived in Jaffna Cultivates The Fruits And Produces Fruit Drinks. He Conducts Fruit Drinks Selling Business Nearest New Bus Stand He Can Earn More Profit and Increase His Sales Due to The Drought. Therefore, He Expects to Convert His Business to The Incorporated Company. The Leading Leasing Company Comes Forward to Issue New Machinery at A Low Rate of Interest.
Which Is the Correct Statement Regarding to The Sarangan Business?
It Is a Commodity Manufacturing Business
It Is a Public Sector Business
It Is a Service Providing Business
It Is a Non-Profit Making Business
Dilini, a diploma holder of sewing children's clothes started a business to sew and sell children's clothes as 'Dilu Tex' with Dilan, a designer, employing capital equally and purchasing a building close to a preschool.
An opportunity of the business of 'Dilu Tex' in the above case is
the business situated close by a preschool.
Dilini being a diploma holder of sewing children's clothes.
getting Dilan to join the business.
employing capital equally by Dilini and Dilan.
Nowadays most businesses prefer to be operated as an incorporated company rather than partnerships, The reason for this is
the distribution of profits.
the division of ownership.
the unlimited liability.
the legal entity.
Madagama Multipurpose Cooperative Society Limited is a ……1….. sector ……2….. organization.
Select the answer that shows the correct terms to the places 1 and 2 in the above statement respectively.
private, for-profit
private, not for profit
public; for profit
public, not for profit
Kamala and Wimala went to 'Mihiri Rasahala' conducted by the Multipurpose Co-operative
Society and bought a cup of fruit for Kamala and a glass of milk for Wimala to fulfill their
thirst occurred while they were working on the farm.
What is the type of business organization that 'Mihiri Rasahala' belongs?
Sole Proprietorship
Societies
Cooperative Societies
Government Departments
Kamala and Wimala went to 'Mihiri Rasahala' conducted by the Multipurpose Co-operative
Society and bought a cup of fruit for Kamala and a glass of milk for Wimala to fulfill their
thirst occurred while they were working on the farm.
What is the production factor that fruit used by 'Mihiri Rasahala belongs?
Land
Labour
Capital
Entrepreneurship
Nipuna and Upuli, the owners of the 'Laksiri Products' business which exports coconut fiber
products received the Best Entrepreneur Award in 2019 and the government offered a foreign
tour to them and an employee.
Receiving the Best Entrepreneur award of year 2019 by Laksiri Products' business is
a strength of the business.
a weakness of the business.
an opportunity of the business
a threat of the business.
The annual sport meet held by Kaluthara Central collage to improve the sports skill of students in the school. More than 200 students were participated to the different sports events. As per the request of the teachers in the school, a first aid booth was built to provide first aid treatment when needed. This was sponsored by Dammi Fashion house Limited, a well known business in Kaluthara area.
01. What are the basic need and wants that have arisen from above incident are:
Health & Medicine
Health & Education
Education & School
Sports & Medicine
01. According to the above, which of the following is not a characteristic of need?
Being essential
Being common
Relatively low in number
Can be created by businessmen
Based on the above incident, which group can be identified as external stakeholders who directly contributed to the school activity?
School principal
Dammi Fashion House Limited
Teachers
Students
According to this scenario, which of the following pairs is most compatible?
Playground- Building
Medicine- First aid
Labour- Teacher
Enterprise- Parents
What is the type of business organization that Dammi fashion house limited belongs to?
Incorporated companies
Joint ventures
State owned companies
Sole proprietorships
A bakery owner in a town decides to reduce the price of bread slightly while improving its quality so that more customers will buy from the shop regularly.
Which main business objective is the owner trying to achieve?
Reducing employee salaries
Increasing customer satisfaction
Avoiding government taxes
Limiting production costs
Which of the following activities best represents a commodity manufacturing business?
A bank providing loans to customers
A factory producing bottled fruit juice
A travel agency organizing tours
A hospital providing medical treatment
A company produces different types of shoes such as sports shoes, office shoes and casual shoes in order to satisfy customers with different lifestyles and income levels. What is the main reason for producing different types of goods?
To reduce employee workload
To satisfy different consumer tastes and income levels
To avoid government regulations
To increase the number of customers
Which of the following best explains the difference between commodities and services?
Commodities satisfy wants while services satisfy needs
Commodities are physical goods while services are activities provided to consumers
Commodities are cheaper than services
Services can only be provided by the government
Fresh Taste Food (Pvt) Ltd is a small fruit juice manufacturing company located in a rural area. The company collects fruits such as mangoes and pineapples from nearby farms and uses clean natural water for production. The production takes place in a factory equipped with modern machines used for washing, cutting, processing, and bottling fruit juice.
The company employs several workers to operate machines, clean the factory and pack the finished products. In addition, an accountant manages financial records while a manager supervises daily operations and production activities.
The business was started by Mr. Perera, who invested his own money to purchase machinery and build the factory. He organized the resources required for production and introduced innovative juice flavors to attract more customers. Mr. Perera also takes the financial risks involved in running the business.
Which combination correctly identifies the factor of production and the example from the case?
Land – Factory workers
Labour – Natural water and fruits
Capital – Machinery used for bottling juice
Entrepreneurship – Packing workers
The decision taken by Mr. Perera to introduce new juice flavours to attract customers mainly demonstrates which characteristic of entrepreneurship?
Physical effort
Risk taking
Innovation
Resource ownership
If the company faces a shortage of workers to operate machines, which factor of production is directly affected?
Land
Labour
Capital
Entrepreneurship
The accountant and factory workers contribute differently to the production process. What is the main difference between their contributions?
Accountant provides physical labour while workers provide mental labour
Accountant provides mental labour while workers mainly provide physical labour
Both provide only physical labour
Both provide only mental labour
Which situation in the case best illustrates the entrepreneur’s responsibility of organizing factors of production?
Workers packing juice bottles
Fruits collected from farms
Mr. Perera purchasing machinery and hiring workers
Natural water used for production
Which of the following best explains why entrepreneurship is essential for this business?
It provides natural resources for production
It organizes resources, takes risks and makes business decisions
It replaces labour in production activities
It reduces the need for machinery
A manufacturing company decides to improve product quality even though production costs increase. The main purpose is to maintain customer trust and loyalty.
Which stakeholder group’s interest is mainly addressed by this decision?
Employees
Customers
Government
Suppliers
A company refuses to increase employee salaries in order to maintain higher profits for investors. Which stakeholder conflict is clearly shown in this situation?
Customers vs Government
Owners vs Employees
Community vs Suppliers
Government vs Customers
A business decides to improve product quality and after-sales services to maintain long-term customer loyalty even though short-term profits decrease. Which strategic objective is mainly reflected here?
Immediate profit maximization
Stakeholder satisfaction for long-term survival
Reduction of labour costs
Avoiding government regulations
A company organizes regular training programs for employees to improve their skills and productivity. Which combined stakeholder objective is mainly achieved through this action?
Government regulation and community development
Employee satisfaction and business productivity
Customer demand and supplier relationships
Owner profit and government tax reduction
.A successful business carefully balances profits for owners, fair wages for employees, safe products for customers, and compliance with government regulations. What does this situation best represent?
Profit maximization strategy
Balanced stakeholder management
Cost reduction strategy
Competitive pricing strategy
In Negombo, Nadeesha started a small homemade yogurt business using her personal savings. She managed everything alone and enjoyed full control, but soon faced difficulties in expanding due to limited capital and high personal risk.
To grow the business, she invited her friends Ishara and Dinuka to join. They formed a partnership, combining their resources and skills. Although the business expanded, conflicts arose regarding decisions and profit sharing. When Dinuka made a poor financial decision, all partners had to share the loss.
Later, they converted the business into a private limited company to raise more capital and reduce personal risk. They issued shares to investors and appointed directors to manage operations. While the business grew rapidly, decision-making became slower due to formal procedures.
At the same time, nearby dairy farmers formed a cooperative society to supply milk collectively, focusing on member welfare rather than profit. However, they struggled to raise sufficient funds for expansion.
Meanwhile, the government established a state-owned dairy enterprise to provide milk products at affordable prices to the public, ensuring market stability rather than maximizing profits.
Why was Nadeesha’s initial business unable to expand despite having increasing demand?
Lack of customer trust
Government restrictions
Limited capital and high personal risk in sole proprietorship
Lack of skilled employees
.When Dinuka’s decision caused a financial loss, why were the other partners also responsible?
Because profits were shared equally
Because partners have mutual agency and unlimited liability
Because the business was registered
Because the business had investors
.What was the most important advantage gained by converting the partnership into a company?
Faster decision-making
Equal voting rights
Ability to raise large capital with limited liability
Reduced need for management
Why did decision-making become slower after forming the company?
Lack of capital
Need for formal approvals and structured management
Reduced number of employees
Less market demand
Why is the cooperative society less capable of expanding compared to the company?
Lack of members
Government interference
Limited capital due to reliance on member contributions
High competition
Among all organizations mentioned, which is most suitable for achieving large-scale growth with minimum personal financial risk?
Sole proprietorship
Partnership
Private limited company
Cooperative society
A partnership business faces a financial crisis after one partner makes a risky investment decision without consulting others. The business cannot repay its debts, and all partners are required to use their personal assets to settle the liabilities. Additionally, serious conflicts arise among partners, leading to the closure of the business.
Which combination of disadvantages of partnership is most clearly illustrated in this situation?
Profit sharing and legal personality
Limited liability and continuity
Unlimited liability and conflicts among partners
Government control and lack of capital
.A well-performing partnership business suddenly stops operations after one partner becomes mentally unstable. At the same time, the remaining partners face difficulties in handling legal matters, as all contracts must be signed in their personal names.
Which two disadvantages of partnership are highlighted in this scenario?
Profit sharing and unlimited liability
No continued existence and no legal personality
Conflicts among partners and profit sharing
Lack of capital and government regulation
A small business initially operated as a sole proprietorship struggled to expand due to limited capital and lack of expertise in marketing and finance. After converting into a partnership, the business showed rapid growth as new partners contributed funds and specialized skills.
Which combination of advantages of partnership is most clearly reflected in this situation?
Easy formation and unlimited liability
Ability to raise more capital and utilization of diverse skills
Legal personality and continuity
Government support and profit maximization
A group of entrepreneurs decided to start a business together because they wanted to reduce individual financial burden while keeping the business easy to establish without complex legal procedures.
Which pair of advantages best explains their decision?
Limited liability and legal identity
Shared liability among partners and ease of formation
Perpetual succession and public investment
Transferability of shares and large-scale operations
Nimal plans to start a small grocery shop using his personal savings. He wants full control and does not want to share profits. However, he is willing to take full responsibility for any losses.
Which form of business organization best suits his situation?
Partnership
Cooperative society
Sole proprietorship
Private limited company
A business owned by two partners collapsed due to heavy debts. One partner had to sell his personal property to settle all debts, including those caused by the other partner.
What characteristic of this business led to this situation?
Limited liability
Unlimited liability of partners
Legal personality
Profit maximization
A group of farmers formed an organization where each member has equal voting rights regardless of their investment. The main goal is to improve their living standards rather than earn profit.
What type of organization is this?
Partnership
Company
Cooperative society
Sole proprietorship
A business requires a large amount of capital for expansion. The owners decide to invite the public to invest and limit their personal risk.
Which business form should they choose?
Sole proprietorship
Partnership
Company
Cooperative
A company has thousands of shareholders, but only a few directors manage daily operations.
What concept does this illustrate?
Unlimited liability
Separation of ownership and management
Mutual agency
Equal voting
A cooperative society aims to provide goods at fair prices rather than maximize profit.
What is its main objective?
Profit
Member welfare
Expansion
Competition
Nimal started a landscaping business using his own savings. He operates under the name "Nimal’s Nature Designs." After a year, he finds it difficult to manage the workload and decides to involve his cousin, who will contribute capital and share both the profits and the management duties.
Regarding Nimal’s initial business ("Nimal’s Nature Designs"), which statement is legally accurate?
The business has a separate legal identity from Nimal.
Nimal was not required to register the business name because he is the sole owner.
If the business fails, Nimal’s personal house could be seized to pay business debts.
The business will continue to exist even if Nimal passes away.
When Nimal’s cousin joins the business to share capital, profits, and management, the organization type changes to a Partnership. What is the legal maximum number of partners allowed for this business?
10
20
50
Unlimited
Which of the following is a mandatory condition requiring a Sole Proprietor to register their business name under the Business Names Ordinance?
When the business employs more than 10 people.
When the business is carried out under a name other than the full name of the owner.
When the initial capital exceeds Rs. 500,000.
When the business operates in more than one province.
A State Corporation and a State Department differ primarily in their funding and legal status. Which statement is correct?
A State Department has a separate legal identity, while a Corporation does not.
A State Corporation is funded by the annual government budget, while a Department is self-funded.
A State Corporation has a separate legal identity, whereas a State Department is a part of a Government Ministry.
Profits from a State Corporation go directly to the Treasury, while Department profits are shared among employees.
"Democratic Control" and "Service-oriented objective" are the primary characteristics of which business organization?
Public Limited Company
State Department
Cooperative Society
Partnership
hree brothers operate a partnership called "Fernando & Sons." They decide to purchase a delivery van and a small warehouse for the business. According to the legal characteristics of a partnership, how must these assets be registered?
In the name of "Fernando & Sons" as it is a registered business.
In the name of any one brother, as a partnership has no more than 20 members.
In the personal names of all three brothers, as the business is not a legal person.
In the name of the Registrar of Companies to ensure limited liability.
A group of local farmers wants to start a business to sell their produce directly to consumers. They want a structure where each member has exactly one vote regardless of how much capital they contribute, and the primary goal is to maximize the mutual benefit of the members rather than maximizing profit for external shareholders. Which business organization should they establish?
A Public Limited Company
A State Corporation
A Cooperative Society
A Sole Proprietorship
The government decides to take over the distribution of a vital medicine to ensure it reaches low-income families at a subsidized rate. They set up a new entity that is funded directly by the annual government budget and is managed by a Director-General who reports to the Minister of Health. This organization is best classified as a:
State Corporation
Government Department
Public Limited Company
Social Enterprise
An entrepreneur named Arun Perera opens a hardware store. He is trying to decide on a name. In which of the following cases is he EXEMPT (not required) from the legal obligation to register his business name under the Business Names Ordinance?
If he names the shop "Arun's Hardware."
If he names the shop "Perera & Co."
If he names the shop "Arun Perera."
If he names the shop "Quality Builders Hub."
Kaveen, a young entrepreneur, started a small business from his home in Matale called "Nature's Essence," producing organic cinnamon-based products. Initially, he operated alone, using his personal savings. As the demand for healthy organic products grew due to increasing health consciousness among the public (Social factor), Kaveen decided to expand.
He invited his friend, Sarath, to join him. They registered the business as a partnership to pool more capital. However, they soon faced challenges: a new government regulation required specific international certifications for export, and a competitor introduced a high-tech automated grinding machine that reduced production costs significantly.
To protect their personal assets from business risks and to raise more capital for automation, they recently converted "Nature's Essence" into a Private Limited Company. Kaveen is now the Managing Director. The company provides employment to 15 local villagers and ensures that its waste disposal does not harm the nearby stream, maintaining a good relationship with the village community.
At the very beginning, when Kaveen operated "Nature's Essence" alone using his savings, what was the primary objective he was fulfilling for himself as a businessman?
Providing organic products to the community.
Achieving self-actualization and earning a profit.
Reducing the unemployment rate in Matale.
Protecting the environment.
When Kaveen and Sarath operated as a Partnership, they were worried about "Unlimited Liability." This means:
The business can continue forever even if a partner dies.
They are only liable for the amount they invested.
Their personal properties could be used to settle business debts.
The business is recognized as a separate legal entity.
The "high-tech automated grinding machine" introduced by a competitor belongs to which environment and what is its impact on Kaveen’s business?
Internal Environment; Strength
External Environment; Threat
Internal Environment; Weakness
External Environment; Opportunity
Which of the following is a "Specific" stakeholder (Task Environment) for Nature’s Essence (Pvt) Ltd?
The Department of Meteorology.
The 15 local villagers employed by the company.
The Global World Health Organization.
The General Public of Sri Lanka.
If "Nature's Essence (Pvt) Ltd" fails to pay a bank loan, why can Kaveen’s personal car NOT be seized by the bank now?
Because it is a small-scale business.
Because of the concept of "Separate Legal Entity."
Because the government protects private companies.
Because he is the Managing Director.
What is the main objective of a business like "Nature's Essence" compared to a Government Department like the "Postal Department"?
Social Welfare vs. Profit
Providing a Service vs. Mutual Benefit
Price Stability vs. Profit
Profit vs. Social Welfare
Before converting to a company, if Kaveen had registered his sole proprietorship as "Kaveen’s Organic Hub," where would he have submitted his application?
Registrar of Companies
Central Bank of Sri Lanka
Divisional Secretariat
Department of Census and Statistics
Which of the following is a "Direct Requirement" (Need) of the 15 employees working for Kaveen?
High dividends on shares.
Low prices for the products.
Tax concessions from the government.
Job security and fair wages.
In the classification of businesses by "Scale," which combination of factors is most commonly used?
Owner's name and location.
Capital invested and number of employees.
Number of products and number of customers.
Type of building and type of machinery.
If Sarath and Kaveen had decided to form a "Cooperative Society" instead of a company, what would be the primary basis for their voting power?
One member, one vote.
Amount of capital contributed.
Seniority in age.
Number of shares owned.
Sripala is an employee of New Lanka Company, met with an accident while on duty and hospitalized him. Here, Sripala’s basic need as follow,
Employment & Security
Employment & Insurance
Health & Safety
Foods & Health
Due to heavy rainfall, a large amount of mangosteen products in the Kalutara area have been destroyed in recent days. A business opportunity that can be raised in this situation is;
Producing and selling fertilizer from discarded spoiled mangoes
Starting a cold storage system
Initiation of flood prevention projects
Taking steps to cultivate mangosteen in another area.
A business owner decides to invest a large amount of money in a new technology that can improve production efficiency, even though the success of the technology is uncertain. Which entrepreneurial characteristic is mainly reflected in this decision?
Dependence on labour
Risk-taking and decision-making ability
Ownership of natural resources
Limiting capital investment
A company decides to introduce strict quality control measures to ensure that products are durable and safe for consumers. Which stakeholder objective is mainly fulfilled through this action?
Securing orders continuously for suppliers
Obtaining quality products for customers
Collecting taxes for the government
Providing loans for investors
A garment factory in Sri Lanka adopts modern computerized sewing machines to increase production speed. This change is mainly due to:
Economic environment
Technological environment
Political environment
Legal environment
In the rural town of Deniyaya, 25 small-scale tea leaf collectors struggled to get a fair price from large factories. To solve this, they formed the "Deniyaya Tea Producers' Society," where each member contributed Rs. 10,000 and had an equal say in decisions. Their primary goal was to provide a fair income to members rather than maximizing profit.
As the business grew, they decided to start a separate high-end retail brand called "Royal Brew." To manage this brand, the society created a separate entity and registered it as a Private Limited Company to limit the financial risk to the society’s core funds.
However, "Royal Brew" soon faced challenges. The Central Bank increased interest rates, making their expansion loan more expensive. Simultaneously, the Consumer Affairs Authority introduced stricter labeling laws . Despite this, "Royal Brew" gained a competitive edge by using biodegradable packaging, which appealed to environmentally conscious customers.
The "Deniyaya Tea Producers' Society" is best classified as which type of business organization?
A Partnership
A Cooperative Society
A State Corporation
A Public Limited Company
Which principle of the Deniyaya Tea Producers' Society ensures that a member with Rs. 50,000 investment has the same power as a member with Rs. 10,000?
Limited Liability
Professional Management
Democratic Control (One member, one vote)
Perpetual Succession
When the society formed "Royal Brew" as a Private Limited Company, what became the "Minimum" number of shareholders required to maintain its legal status?
1
2
7
20
The Central Bank's decision to increase interest rates is an example of which environmental factor affecting "Royal Brew"?
Internal Environment - Weakness
External Environment - Social factor
External Environment - Economic factor
Task Environment - Competitor factor
"Royal Brew" uses biodegradable packaging to protect the environment. This is an example of a business:
Increasing its production costs unnecessarily.
Fulfilling its social responsibility.
Following a mandatory Technological factor.
Meeting the needs of the Shareholders only.
If "Royal Brew" defaults on a loan, why can the bank NOT claim the personal land owned by the 25 tea collectors?
Because the collectors are government employees.
Because the business is located in a rural area.
Because the business is a small-scale venture.
Because the company has a "Separate Legal Entity" and "Limited Liability."
Which of the following is an "Internal Stakeholder" specifically for "Royal Brew (Pvt) Ltd"?
The tea leaf collectors in Deniyaya.
The Consumer Affairs Authority.
The competing tea brands in the market.
The Board of Directors and Employees.
The "stricter labeling laws" introduced by the Consumer Affairs Authority belong to which environment?
Political and Legal Environment
Technological Environment
Social Environment
Internal Environment
In terms of "Objective," how does the "Deniyaya Tea Producers' Society" differ from "Royal Brew (Pvt) Ltd"?
The Society aims for Profit; the Company aims for Welfare.
The Society aims for Mutual Benefit; the Company aims for Profit.
The Society aims for Price Stability; the Company aims for Mutual Benefit.
There is no difference in their objectives.
Which organization would be responsible for classifying whether "Royal Brew" is a "Small Scale" or "Large Scale" business based on employment data?
The Registrar of Companies
The Central Bank of Sri Lanka
The Department of Census and Statistics
The Divisional Secretariat
