Free Forms of Business Organisation 02 Practice Test - 11th Grade - Commerce 

Question 1

Which is the form of organization where the initial cost of setting-up of the business is least? 

A.

Joint Stock Company 

B.

Sole Proprietorship 

C.

Partnership 

D.

All of the above

SOLUTION

Solution : B

As far as initial business setting-up costs are concerned, sole proprietorship is the least expensive way to start a business. 

Question 2

What is the capital consideration in a company? 

A.

Very little resources

B.

A little resources

C.

A lot of resources

D.

None of the above

SOLUTION

Solution : C

In a company, the financial resources is a lot as compared to partnership and sole proprietorship. 

Question 3

Mr. Ram has his own artificial jewellery shop. He prefers to not join hands with any other persons, why? 

A.

He wants a small business. Limited savings and a personal connection to the business. 

B.

He wants a small business but prefers more risk.  

C.

He wants a small business. He prefers to roam and get clients. 

D.

None of the above. 

SOLUTION

Solution : A

Mr. Ram has his own shop. He prefers to not join hands with any other person, because in a small business, there are limited savings, and a personal connection to the business. 

Question 4

Which type of organization is best when direct contact with customers is not required? 

A.

Sole Proprietorship 

B.

Partnership 

C.

Joint Stock Company

D.

All of the above

SOLUTION

Solution : C

A company is the best organization in regard to no contact with the customers. 

Question 5

Spicetech is a medium sized firm. The firm sells spices to different parts of the world. Sita is a partner that adds money but yet does not take part in the daily management. She is a part of another company and handling the management there. What kind of partner is she? 

A.

Nominal partner

B.

Sleeping partner

C.

Active partner

D.

Secret partner

SOLUTION

Solution : B

A sleeping partner is one who adds money but yet does not take part in the daily management.

Question 6

Rahul is a partner of an automobile firm. He adds money to the firm, handles the management  and also shares the losses. But on the other hand, he hides his identity from the general public.

A.

Nominal partners

B.

Sleeping parnters

C.

Secret partners

D.

Active partners

SOLUTION

Solution : C

Secret partners hide their identity from the general public. 

Question 7

Mr David is a well-known layer. He has joined a couple of firms for known facts and reasons. He is a partner of a big law firm in Mumbai. But he does not add capital, nor does he participate in the management. What kind of partner is he with the big law firm?

A.

Active partner

B.

Sleeping partner

C.

Secret partners

D.

Nominal partners

SOLUTION

Solution : D

Nominal partners do not add capital, participate in the management nor do they receive any profits. 

Question 8

A partnership that is formed to create a certain objective or goal. 

A.

Partnership at Will 

B.

Particular Partnership 

C.

Limited Partnership 

D.

General Partnership 

SOLUTION

Solution : B

A partnership that is formed to create a certain objective or goal is called particular partners. 

Question 9

What is the maximum number of partners in a partnership firm? 

A.

52

B.

51

C.

50

D.

49

SOLUTION

Solution : C

Maximum no. of partners in a partnership firm is 50.

Question 10

Which of the following factors is an advantage for a sole proprietorship? 

A.

Quick decision making 

B.

Secrecy

C.

More funds

D.

Sharing of risks 

SOLUTION

Solution : A

Quick decision making is an advantage for a sole proprietorship. 

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