1. Which of the following statements is correct for wholesalers?
- a) They undertake additional activities.
- b) They generally take the title of the goods and bear the business risks in their own name.
- c) They engage in buying and selling of goods.
- d) All of these
Answer:
d) All of these
2. To sell ready-made garments for children, men, women, etc. is the example of:
- a) General Store
- b) Single-line shop
- c) Departmental Store
- d) Single-product shop
Answer:
b) Single-line shop
3. The company form of organization is governed by which of the following Acts:
- a) The Companies Act, 1866
- b) The Companies Act, 1913
- c) The Companies Act, 2013
- d) The Companies Act, 1956
Answer:
c) The Companies Act, 2013
4. Which of the following comes under Modern Small Industries?
- a) Khadi
- b) Handicrafts
- c) Coir
- d) Powerlooms
Answer:
d) Powerlooms
5. Social interests and business interests are ________.
- a) Contradictory
- b) Complementary
- c) Counteractive
- d) Conflicting
Answer:
b) Complementary
6. Assertion (A): Rate of Interest on Savings account is lower than Fixed Deposit account.
Reason (R): Savings account is most suitable for small households’ savings.
- a) Both A and R are true and R is the correct explanation of A.
- b) Both A and R are true but R is not the correct explanation of A.
- c) A is true but R is false.
- d) A is false but R is true.
Answer:
a) Both A and R are true and R is the correct explanation of A.
7. Which of the following is part of the Village and Small Industries Sector?
- a) Handlooms
- b) All of these
- c) Sericulture
- d) Handicrafts
Answer:
b) All of these
8. Since the main objective of the business is to earn profits, which of the following is not an appropriate method of earning profits:
- a) All of these
- b) Inflating the prices
- c) Selling a good quality product at reasonable prices
- d) Selling low-quality product at low prices
Answer:
a) All of these
9. In which year National Small Industries Corporation (NSIC) was set up?
- a) 1953
- b) 1954
- c) 1956
- d) 1955
Answer:
b) 1954
10. A Government Company may be formed as which of the following:
- a) Public Company
- b) Private Company
- c) Either Public or Private Company
- d) Neither Public nor Private Company
Answer:
c) Either Public or Private Company
11. Explain in brief why nations are involved in foreign trade?
Answer:
Nations are involved in foreign trade to gain access to goods and services that are not readily available or are cheaper to import than to produce. It allows nations to leverage their comparative advantages, fosters economic growth, and provides access to a wider variety of products for consumers.
12. Santosh and Sandeep both completed their MBA education and thought of making business as their career. Santosh set up a Flour Mill, while Sandeep started the Wholesale Business of ‘Ghee’. Both the friends are engaged in the creation of utility in their respective businesses.
Point out the creation of utility being done by each of them.
Answer:
Santosh is creating utility by converting raw wheat into flour, which adds value by making it useful for consumers. Sandeep is creating utility by purchasing ghee in bulk and selling it to other retailers, creating value through the distribution process.
13. A thread manufacturing company opens shops at different locations in India. The shops have identical decorations. The prices of goods are fixed. In this way, they eliminate unnecessary middlemen, benefiting the consumers.
Identify the type of shop referred to.
State any two merits of the type of retail outlet.
Answer:
The shop referred to is a Chain Store.
Merits:
- Economies of scale due to bulk purchasing.
- Uniform pricing and branding across all outlets.
14. After reading an advertisement in the newspaper about an upcoming public issue of preference shares of a pharmaceutical company, Tushar made up his mind to invest money in that issue. Later on, he discussed his plan with his friend Vikesh who is a stockbroker. Vikesh, on the contrary, advised him to invest in equity instead.
Give any three possible reasons why Vikesh wants Tushar to invest in equity and not in preference shares.
Answer:
- Equity shares offer higher returns (dividends and capital gains) than preference shares.
- Equity shareholders have voting rights, unlike preference shareholders.
- Equity shares have greater growth potential over time.
**15. After completing the studies, Priyanka decided to start her own business of handmade chocolates. After analyzing all the pros and cons, she concluded that the total funds required are Rs. 12,00,000. She had Rs. 2,00,000 in her savings bank account. As these funds were insufficient to start the business, she approached Axis Bank for obtaining a loan of Rs. 10,00,000. The loan was approved within a month. On the basis of the given case, answer the following questions:
- Categorize the two types of funds on the basis of ownership.
- Answer:
- Owned funds: Rs. 2,00,000 (Savings bank account)
- Borrowed funds: Rs. 10,00,000 (Loan from Axis Bank)
- Out of the two sources of funds, which one is a permanent source of finance?
- Answer: Owned funds (savings) are permanent as they do not require repayment.
- Which source of funds requires a legal obligation to pay interest at a fixed rate at regular intervals?
- Answer: Borrowed funds (loan from Axis Bank) require a legal obligation to pay interest.
16. Rajinder Singh and his brother Ravinder Singh own a large-scale retail outlet at a central location in Amritsar. They deal with varied kinds of products like textiles, footwear, cosmetics, etc., which are sold through different divisions within the establishment.
Identify the type of retail outlet being described in the above lines.
State any two merits and two limitations of the type of retail outlet.
Answer:
The retail outlet described is a Departmental Store.
Merits:
- Wide variety of goods under one roof.
- Convenient shopping experience for customers.
Limitations:
- High operational costs.
- Competition with specialized stores.
17. Write a note on the Automatic Vending Machine.
Answer:
An Automatic Vending Machine is a self-service machine that dispenses goods (like snacks, beverages, or tickets) after the customer inserts money. It provides convenience and quick service, with minimal human intervention.
18. Annaya was doing research on the banking sector for her assignment. While browsing through the website of the Reserve Bank of India, she came across a specimen of a type of Hundi which is like any other bearer instrument and is payable to the holder or bearer.
What is a Hundi?
Answer:
A Hundi is a financial document used in India, similar to a promissory note, that functions as an instrument of credit. It can be transferred from one person to another by endorsement, making it a bearer instrument.
- Identify the type of Hundi being described above.
- Answer: The type of Hundi described is a Muddati Hundi (also called a bearer Hundi).
- Describe briefly any two other types of Hundi.
- Answer:
- Dhani: A Hundi used for payment of goods sold or services rendered.
- Shahjog: A Hundi used for remitting money or transferring funds across distances.
19. How do online transactions increase the risk of anonymity and non-traceability of parties?
Answer:
Online transactions can increase the risk of anonymity because the identities of buyers and sellers may not be verified, and the use of digital currencies or anonymous payment systems can make it harder to trace the parties involved, leading to potential fraudulent activities.
20. List the names of some enterprises under the public sector and classify them.
Answer:
Examples of public sector enterprises in India include:
- Steel Authority of India (SAIL) – Public Sector Undertaking (PSU)
- Bharat Heavy Electricals Limited (BHEL) – PSU
- Oil and Natural Gas Corporation (ONGC) – PSU
- Indian Railways – Government Enterprise
These enterprises can be classified into PSUs, government enterprises, and autonomous bodies.
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Certainly! Here’s the rewritten format with at least one line space between each question and answer:
21.Permitting another party in a foreign country to produce and sell goods under your trademarks, patents, or copyrights in lieu of some fee is another way of entering into international business. This is through ________.
- a) Sale of goodwill
- b) Sale of copyrights
- c) Sale of trademark
- d) Licensing and franchising
Answer:
d) Licensing and franchising
22.State the full form of RWED:
- a) Rural and Women Experiential Development
- b) Rural and Women Employment Development
- c) Rural and Women Engagement Development
- d) Rural and Women Entrepreneurship Development
Answer:
d) Rural and Women Entrepreneurship Development
23.Stages in the formation of a public company are in the following order:
- a) Promotion, Incorporation, Capital Subscription, Commencement of Business
- b) Incorporation, Capital of Business, Capital Subscription Commencement of Business, Promotion
- c) Promotion, Commencement of Business
- d) Capital Subscription, Promotion, Incorporation, Commencement of Business
Answer:
a) Promotion, Incorporation, Capital Subscription, Commencement of Business
24.Retail trade is the example of the type of internal trade on the basis of:
- a) Levels
- b) Quantity
- c) Quality
- d) Relationship
Answer:
a) Levels
25.Which of the following is incorrect regarding the types of manufacturing enterprises?
- a) In a Small enterprise, investment in plant and machinery is more than twenty-five lakh rupees but does exceed five crore rupees.
- b) In a Microenterprise, investment in plant and machinery does not exceed twenty-five lakh rupees.
- c) In a Medium enterprise, investment in plant and machinery is more than five crore rupees but does not exceed ten crore rupees.
- d) In a Small enterprise, investment in plant and machinery is more than twenty-five lakh rupees but does not exceed three crore rupees.
(a) In a Small enterprise, investment in plant and machinery is more than twenty-five lakh rupees but does exceed five crore rupees. (This is incorrect because small enterprises are defined as having investments up to ₹10 crore, not ₹5 crore.)
26.It is not an application of e-business:
- a) Online trading
- b) Online bidding
- c) Contract R&D
- d) Online procurement
Answer:
c) Contract R&D
27.Application for approval of the name of a company is to be made to:
- a) Government of India
- b) Government of the State in which Company is to be registered
- c) Registrar of Companies
- d) SEBI
Answer:
c) Registrar of Companies
28.Which of the following is part of the small-scale sector?
- a) Paper Products and Printing
- b) Food Products
- c) All of these
- d) Cotton Textiles
Answer:
c) All of these
29.Which of the following statements is false?
- a) Long-term funds fulfill the financial requirements for a period exceeding 5 years.
- b) Medium-term sources provide funds for a period of more than one year but less than five years.
- c) Medium-term sources provide funds for a period of more than one year but less than three years.
- d) Short-term funds are required for a period not exceeding one year.
Answer:
c) Only B is false
(Medium-term sources provide funds for a period of more than one year but less than five years. The statement “Medium-term sources provide funds for a period of more than one year but less than three years” is false.)
30.Assertion (A): A Company has Perpetual Existence.
Reason (R): The existence of a company is not affected by the death, retirement, resignation, insolvency, or insanity of its members.
- a) Both A and R are true and R is the correct explanation of A.
- b) Both A and R are true but R is not the correct explanation of A.
- c) A is true but R is false.
- d) A is false but R is true.
Answer:
a) Both A and R are true and R is the correct explanation of A.
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