Free Forms of Business Organisation 01 Practice Test - 11th Grade - Commerce 

Question 1

Mrs. Rita has her own beauty parlour at the Cross Street road. Which form of business organisation is most suitable for her? 

A.

Partnership 

B.

Sole Proprietorship 

C.

Joint Stock Company 

D.

Cooperative Society

SOLUTION

Solution : B

Sole proprietorship is the best option for her, as it requires personal touch for the business to grow. 

Question 2

State whether the statement is correct or incorrect. 
Does the government support a cooperative society?

A.

Correct

B.

Incorrect

SOLUTION

Solution : A

Correct. The government does support the cooperative society in the form of taxes, subsidies and low-interest rate on loans. 

Question 3

A partner who contributes capital but does not take part in the business management of a firm. 

A.

Nominal partner

B.

Sleeping partner

C.

Active partner

D.

Secret partner

SOLUTION

Solution : B

A sleeping partner is one who contributes capital but does not take part in the business management of a firm. 

Question 4

Which partner allows to use his /her name by a firm. 

A.

Nominal partner

B.

Active partner

C.

Secret partner

D.

Dormant partner

SOLUTION

Solution : A

A nominal partner is one who allows the use of his/her name by a firm. 

Question 5

Which forms of organization has the longest life time?  

A.

Sole proprietorship 

B.

Partnership 

C.

Joint stock company

D.

All of the above

SOLUTION

Solution : C

A joint stock company has the longest lifetime as compared to sole proprietorship and partnership. 

Question 6

Which form of business requires several documents and legal requirements before it gets functioning. 

A.

Sole proprietorship 

B.

Joint stock company

C.

Partnership 

D.

All of the above

SOLUTION

Solution : B

A joint stock company requires several documents and legal requirements before it gets functioning. 

Question 7

A formation of _______________________ does not require any legal documentations. 

A.

Partnership 

B.

Sole Proprietorship 

C.

Joint Stock Company 

D.

Partnership 

SOLUTION

Solution : B

A formation of sole proprietorship does not require any legal documentation. 

Question 8

Abid and Rashid come together to form a partnership, pool in resources, and decide to share the profit and losses. Their liability is unlimited and joint. Their personal resources may be called to pay the debts of the business. What type of partnership do they share?

A.

General Partnership

B.

Limited Partnership

C.

Partnership at will

D.

Particular partnership

SOLUTION

Solution : A

They share a general partnership where both pool in resources, decide to share the profit and losses and also their liability is unlimited.

Question 9

State True or False.

A particular partnership does not dissolve automatically when the purpose is fulfilled. 

A.

True 

B.

False

SOLUTION

Solution : B

A particular partnership does get dissolved automatically once the purpose is fulfilled or when the time duration expires. 

Question 10

State True or False. The partners are not liable to repay any debt. 

A.

True 

B.

False

SOLUTION

Solution : B

False. The partners are liable to repay debts even from their personal belongings, in case if the assets of the company are not sufficient to meet the debts. 

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