Chapter 4: Sole Proprietorship — Online MCQ Test
COMMERCE · CLASS 11th · Tamil Nadu State Board
Practice Chapter 4: Sole Proprietorship with a free chapter-wise online MCQ test.
This chapter covers: Focusing on single-owner enterprises this chapter defines sole proprietorships and details their operational characteristics. Students examine advantages like swift decision-making....
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Chapter 4: Sole Proprietorship — Important Questions & Answers
Who is the primary owner and operator of a sole proprietorship?
- A. A group of partners
- B. A single individual
- C. The government
- D. A board of directors
Answer: B. A single individual
A sole proprietorship is a form of business organization owned, managed, and controlled by a single individual.
A sole proprietorship is a form of business organization owned, managed, and controlled by a single individual.
Which of the following is the most suitable characteristic of a sole proprietorship?
- A. Legal entity separate from the owner
- B. Limited liability
- C. Ease of formation
- D. Compulsory registration
Answer: C. Ease of formation
Sole proprietorships are easy to form as they require minimal legal formalities.
Sole proprietorships are easy to form as they require minimal legal formalities.
Which of the following is considered an advantage of a sole proprietorship?
- A. Quick decision-making
- B. High capital availability
- C. Continuity of business
- D. Risk sharing
Answer: A. Quick decision-making
Since a single person makes all decisions, the process is quick without needing consultations.
Since a single person makes all decisions, the process is quick without needing consultations.
Which statement best compares a sole proprietorship with a partnership?
- A. Both have limited liability
- B. Sole proprietorship has more capital than a partnership
- C. Sole proprietorship has faster decision-making than a partnership
- D. Both require mandatory government registration
Answer: C. Sole proprietorship has faster decision-making than a partnership
Because there is only one decision-maker, a sole proprietorship is faster than a partnership where consensus is required.
Because there is only one decision-maker, a sole proprietorship is faster than a partnership where consensus is required.
In the context of the Tamil Nadu syllabus, which statement accurately reflects the status of a sole proprietorship?
- A. It is a legal entity distinct from the proprietor
- B. It is the simplest form of business organization
- C. It requires a minimum of two members
- D. It is governed by the Companies Act 2013
Answer: B. It is the simplest form of business organization
Sole proprietorship is defined as the simplest and oldest form of business organization, requiring no specific legislation to establish.
Sole proprietorship is defined as the simplest and oldest form of business organization, requiring no specific legislation to establish.