Form of Business organization

MCQ Based Questions on Class 11 Business studies for chapter-2 Form of Business organization

Find below MCQ Based Questions on Class 11 Business studies for chapter-2 Form of the Business organization all the MCQ questions are explained with correct answers and explanations. To check the correct answer click on the answer. 

Find MCQ questions for class 11 Business studies-2 Form of Business organization

Business Studies - MCQ on Form of Business organization

Class XI

Q1. The member of Joint Hindu Family can be acquired

I. By Contract

II. By Agreement

III. By Birth

IV. None of these

Answer:

By Birth

Explanation: Three successive generations can e members in business in Joint Hindu Family

Q2. The in charge off joint Hindu family is known as

I. Managing Partner

II. Karta

III. Proprietor

IV. None of these

Answer:

Karta

Explanation: The business is controlled by the head of the family who is the eldest member and is called karta.

Q3. The liability of member of joint Hindu family is

I. Unlimited

II. Limited to the extract of property

III. Limited up to share of profits

IV. None of these

Answer:

Limited to the extract of property

Explanation: The liability of all members except the karta is limited to their share of property of the business.

Q4. Liability in partnership is

I. Unlimited

II. Limited

III. Secure

IV. None of these

Answer:

Unlimited

Explanation: The partners of a firm have unlimited liability. Personal assets may be used for repaying debts in case the business assets are insufficient.

Q5. Joint sector undertaking use government as well as private

I. Resources

II. Sector

III. Enterprises

IV. None of these

Answer:

Resources

Explanation: Joint sectors take benefits for growth.

Q5. Government companies are registered under:

I. Company Law

II. Joint Stock Companies

III. Income Tax

IV. Company Act 1956

Answer:

Company Act 1956

Explanation: Company Act 1956 enables to get company registered for government.

Q 6. A sole trade business is started by

I. At least two persons a

II. Any one person

III. At least seven person

IV. None of these

Answer:

Any one person

Explanation: A sole proprietorship require only one person to start business

Q7.The liability of sole trader is

I. Limited only o the investor in the business

II. Limited to total property of the business

III. Unlimited

IV. None of these

Answer:

Limited to total property of the business

Explanation: The liability is limited up to the capital invested of the investor

Q8. A sole trader and his business exist

I. Independently

II. Together

III. For others

IV. None of these

Answer:

Independently

Explanation: A sole proprietor is independent in nature

Q9. A sole trader can take following steps while expanding his business

I. Employ a servant

II. Take a partner

III. Employ a servant & Take a partner

IV. None of these

Answer:

Employ a servant

Explanation: As it requires only one person so rest f the help can e taken from the servant

Q10.Sole proprietorship is suitable for

I. Large scale concerns

II. Medium scale concerns

III. Small scale concerns

IV. None of these

Answer:

Small scale concerns

Explanation: Generally sole proprietor ship I suitable for Small scale concerns

Because scope is limited in large companies activities are much more and it becomes difficult to handle.

Q11.Sole Trade Business helps in

I. Concentration of wealth

II. Diffusion of wealth

III. Both

IV. None of these

Answer:

Diffusion of wealth

Explanation: Through sole trade business flow of wealth is developed

Q12. Decision making in sole trade business is:

I. Quick

II. Slow

III. Neither very quick

IV. Nor very slow

Answer:

Quick

Explanation: Decision making is very quick because the owner is the only decision maker he can decide according o his convenience

Q13. A sole trader has

I. Unlimited resources

II. Limited sources

III. Sufficient resources

IV. None of these

Answer:

Limited resources

Explanation: He is the whole and sole owner and generally this business is convenient for small scale so he use resources according to his needs.

Q14. A sole Trader

I. Cannot keep his business secrets

II. Can keep his business secrets

III. None

IV. All of them

Answer:

Can keep his business secrets

Explanation: As there is no involvement and he is the owner so he can keep business secret up to him

Q15. There is separation of ownership and management in

I. Sole proprietorship

II. Partnership

III. Company

IV. All business organizations

Answer:

All business organizations

Explanation: Ownership and management are two different aspects of business

Q16.The karta in Joint Hindu family business has

I. Limited liability

II. Unlimited liability

III. No liability for debts

IV. Joint liability

Answer:

unlimited liability

Explanation: All the members in the family has limited liability up to property but karta has unlimited liability

Q17. What principle is followed in a cooperative society?

I. One share one vote

II. One man one vote

III. No vote

IV. Multiple votes

Answer:

One man one vote

Explanation: To choose the secretary only one vote from one member is allowed

Q18. The board of directors of a joint stock company is elected by

I. General public

II. Government bodies

III. Shareholders

IV. Employees

Answer:

Shareholders

Explanation: Shareholders of a company have right to choose the Directors who will provide a guideline to functions

Q19. The maximum number of partners allowed in the banking business is

I. Twenty

II. Ten

III. No limit

IV. Two

Answer:

Two

Explanation: The maximum number of partners allowed in a banking business is Two.

Q20. Profits do not have to be shared. This statement refers to

I. Partnership

II. Joint Hindu family business

III. Sole proprietorship

IV. Company

Answer:

Sole proprietorship

Explanation: A sole proprietorship has only one person business so he does not have to share any profit

Q21.The capital of a company is divided into number of parts each one of

Which are called?

I. Dividend

II. Profit

III. Interest

IV. Share

Answer:

. Share

Explanation: A share is a part of capital in a company which is divided into number of units

Q22. Provision of residential accommodation to the members at reasonable

Rates is the objective of

I. Producer’s cooperative

II. Consumer’s cooperative

III. Housing cooperative

IV. Credit cooperative

Answer:

. Consumer’s cooperative

Explanation: Co-operatives is a mean to provide products to members at reasonable rates.

Q23 A partner whose association with the firm is unknown to the general

Public is called

I. Active partner

II. Sleeping partner

III. Nominal partner

IV. Secret partner

Answer:

Sleeping Partner.

Explanation: Sleeping partner usually does not take active part in daily activities of the business.

Q24. For which of the following types of business do you think a sole

Proprietorship form of organization would be more suitable, and why?

I. Grocery store

II. Shipping

III. Banking

IV. Infrastructure

Answer:

Grocery store

Explanation:All other firms are very big and sole proprietor is suited for a small firm

Q25. For which of the following types of business do you think a partnership

Form of organization would be more suitable, and why?

I. Medical clinic

II. Legal consultancy

III. Infrastructure

IV. None

Answer:

Infrastructure

Explanation: . Infrastructure is a operated on a very large scale so it is better to opt for partnership.

Q26. A partnership concern can be registered under partnership act of

I. 1949

II. 1956

III. 1932

IV. None of these

Answer:

. 1932

Explanation: The partnership act was formed in the year 1932

Q27.A partnership can be formed by at least

I. Two persons

II. Three persons

III. Seven persons

IV. None

Answer:

. Two persons

Explanation: Minimum two persons are required o form a partnership firm

Q 28. In partnership liability of a partner is

I. Limited up to capital

II. Limited up to their profits

III. Unlimited

IV. Limited up to their profits

Answer:

Limited

Explanation: Whatever the company will earn the profit the partners are liable for that.

Q29. A partner does not take part into working of concern is called

I. Nominal Partner

II. Sleeping Partner

III. Partner by estoppels

IV. None of these

Answer:

Sleeping Partner

Explanation: Although he is a partner but he don’t work for the company and he is considered as sleeping partner

Q30.Under Indian contract act an agreement with minor is

I. Valid

II. Void

III. Enforceable

IV. None of these

Answer:

Void

Explanation: It is clearly mentioned in partnership Act 1932 that any agreement wit minor is void

Q31. Registration of partnership is

I. Compulsory

II. Voluntary

III. Not Needed

IV. None of the above

Answer:

Compulsory

Explanation: A partnership firm is formed legally only when it is registered

Q32. The ownership of property by more than one owner is called

I. Partnership

II. Co ownership

III. Partnership

IV. None

Answer:

Partnership

Explanation: When more than one person and less than seven people enter into an agreement it falls under Partnership act.

Q33. When two persons start business together and share profits and losses is called

I. partnership

II. Sole proprietorship

III. Public limited

IV. Private limited

Answer:

Partnership

Explanation: When more than one person and less than seven people enter into an agreement it falls under Partnership act.

Q34. In partnership there exists relationship of

I. Principal and agent

II. Owner and servant

III. Employer and employee

IV. All

Answer:

Principal and agent

Explanation: Every partner is a proprietor as well as an agent of af firm.

Q35. A special partner’s liability is

I. Unlimited

II. Limited

III. Not Liable

IV. None

Answer:

Not Liable

Explanation: Special partner is not a part of daily activities; he is nominated for promotion and endorsing of business only.

Q36. Profit sharing is based

I. On contribution of capital

II. On extent of responsibility

III. On contract among partners

IV. None

Answer:

On contract

Explanation: Profit will be base on the terms and conditions formed by the partner while forming partnership firm it is clearly mentioned in partnership deed

Q37.A private limited company must have at least

I. Three Persons

II. Seven Persons

III. None

IV. Two persons

Two persons

Answer:

To form a private company minimum two members are required

Explanation:

Q38. A public limited company must have at least

I. Seven Persons

II. Ten persons

III. Twenty Persons

IV. Two persons

Answer:

Seven persons

Explanation: To form a private company minimum seven members are required

Q39. Private limited companies

I. Allow transfer of share

II. Does not Allow transfer of share

III. Allow transfer of share with consent of shareholder

IV. None

Answer:

Does not Allow transfer of share

Explanation: Shares cannot be transferred to other person

Q40. An Indian Company is one whose

I. Business is situated in India

II. Whose majority shares are held by Indians

III. Incorporated in India

IV. None

Answer:

Incorporated in India

Explanation: The Company which is based in India is incorporated in India under Indian Company Act.

Q41. The primary aim of cooperative is to

I. Earn more profits

II. Serve members

III. Raise production

IV. None

Answer:

Serve member

Explanation: The cooperative society is a voluntary association of persons, who join together with the motive of welfare of the members.

Q42. Membership of cooperative is

I. Compulsory

II. Voluntary

III. Not essential

IV. Temporary

Answer:

Voluntary

Explanation: It’s a voluntary association for the development of particular sector and people can extend their helping hand for it.

Q43. Which of the following organization is not governed by specific act.

I. Partnership

II. Co-operative

III. Sole proprietor

IV. Company

Answer:

Sole proprietor

Explanation: No specific laws have been laid down by the government because of the individual entitlement and limited liabilities and recourses.

Q44. What is the maximum number of member to form an organization.

I. 2

II. 7

III. 10

IV. Unlimited

Answer:

Unlimited.

Explanation: As per company act only min number enrolment is applicable.

Q45. How a partnership firm can winded up.

I. At will

II. At company act

III. Forced

IV. Co-operative act

Answer:

At Will

Explanation:: The business can be unwinded on the consent of the partners.

Q46. Which one of the of the statement is not true for sole proprietorship.

Sole trader has limited liability

No legal formality is required to start a business

It is the oldest form of business

Sole trader can guard his secrets.

Answer:

Sole trader has limited liability

Explanation: Sole proprietor has unlimited liabilities.

Q47. Profit sharing in partnership firm is based on.

I. On the contribution of capital

II. On the extent of responsibility undertaken.

III. On contract among partners

IV. None of these.

Answer:

On contract among partners.

Explanation: Having various types of partners contracts among partner is only way to distribute profit.

Q48. Which act regulates Joint Hindu Family Firm?

I. Hindu Law

II. Companies Act 1956

III. Hindu Law and Hindu Succession Act 1956

IV. Partnership Act

Answer:

Hindu Law and Hindu Succession Act 1956

Explanation: It was formed to regulate Hindu Families business and all he firs formed as Joint Hindu Family business is regulated by this act

Q49.For taking decisions in a partnership whose consent is required

I. Board of Directors

II. Special Partners

III. All Partners

IV. Managing Committee

Answer:

All Partners

Explanation: A decision in a partnership firm cannot be taken without consent of all active partners

Q50.What is the minimum number of members in a cooperative society?

I. 2

II. 7

III. 10

IV. No limit

Answer:

10

Explanation: According to Cooperative societies Act 1912 minimum members of a cooperative is 10

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