Unit 2: Forms of Business Organizations — Online MCQ Test
COMMERCE & ACCOUNTANCY · CLASS 11 INTERMEDIATE 1 YEAR · Telangana State Board
Practice Unit 2: Forms of Business Organizations with a free chapter-wise online MCQ test.
This chapter covers: This chapter details sole proprietorship Hindu Undivided Family partnership firms cooperative societies and joint-stock company structures advantages disadvantages and suitability..
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Unit 2: Forms of Business Organizations — Important Questions & Answers
Which form of business organization is owned, controlled, and managed by a single person?
- A. Partnership firm
- B. Joint-stock company
- C. Sole proprietorship
- D. Co-operative society
Answer: C. Sole proprietorship
In a sole proprietorship, a single individual owns and controls the business. It is the simplest form of business organization.
In a sole proprietorship, a single individual owns and controls the business. It is the simplest form of business organization.
In a Hindu Undivided Family (HUF) business, the manager of the family business is called the:
- A. Partner
- B. Karta
- C. Director
- D. Secretary
Answer: B. Karta
The senior-most member of a Hindu Undivided Family business who manages it is called the Karta. He has control over the business affairs.
The senior-most member of a Hindu Undivided Family business who manages it is called the Karta. He has control over the business affairs.
A business started by one person with unlimited liability is most suitable when:
- A. Large capital is required immediately
- B. Quick decision-making is important
- C. Many expert managers are needed
- D. Ownership must be widely spread
Answer: B. Quick decision-making is important
A sole proprietorship allows quick decisions because the owner alone controls the business. It suits small businesses with simple operations.
A sole proprietorship allows quick decisions because the owner alone controls the business. It suits small businesses with simple operations.
Which form of business organization combines the advantages of limited liability and separate legal entity?
- A. Sole proprietorship
- B. Partnership firm
- C. Joint-stock company
- D. Hindu Undivided Family
Answer: C. Joint-stock company
A joint-stock company has separate legal existence and generally offers limited liability to shareholders. These are key advantages of the company form.
A joint-stock company has separate legal existence and generally offers limited liability to shareholders. These are key advantages of the company form.
A businessman wants full control, easy formation, and complete secrecy, but can tolerate unlimited liability. Which form should he choose?
- A. Joint-stock company
- B. Partnership firm
- C. Sole proprietorship
- D. Co-operative society
Answer: C. Sole proprietorship
Sole proprietorship gives full control, simplicity, and secrecy to the owner. The main drawback is unlimited liability, which the businessman is willing to accept.
Sole proprietorship gives full control, simplicity, and secrecy to the owner. The main drawback is unlimited liability, which the businessman is willing to accept.