Tag: elements of business

Questions Related to elements of business

Characteristics of sole proprietorship form of business is/ are
$(1)$ Single owner
$(2)$ Unlimited liability
$(3)$ Control by partner
$(4)$ No sharing of profit and loss
Select the correct answer from the options given below.

elements of business sole trade meaning, features and merits of sole proprietorship sole proprietorship - meaning & features formation, characteristics, merits & demerits and objectives of sole proprietorship

  1. $(1)$ and $(4)$ only

  2. $(2), (3), (4)$

  3. $(2)$ and $(1)$ only

  4. $(4), (2)$ and $(1)$

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Correct Option: D

Which of the following statements is/ are TRUE and which is/ are FALSE?
I. Sole proprietorship business includes only shopkeepers.
II. In sole proprietorship business the proprietor has full control over each and every activity of the business.
III. The sole proprietor is always in a position to maintain good personal contact with the customers and employees.
IV. In a HUF business all co-parceners have equal share in the profits of the business.
Select the correct answer from the options given below.

elements of business sole trade meaning, features and merits of sole proprietorship sole proprietorship - meaning & features formation, characteristics, merits & demerits and objectives of sole proprietorship

  1. I - False, II - False, III - True, IV - True

  2. I - False, II - True, III - True, IV - False

  3. I - True, II - False, III - True, IV - False

  4. I - False, II - True, III - False, IV - True

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Correct Option: C

Sole proprietorship form is most suitable : ________.

elements of business sole trade meaning, features and merits of sole proprietorship sole proprietorship - meaning & features formation, characteristics, merits & demerits and objectives of sole proprietorship

  1. Where the nature of business is simple

  2. Where manual skill is required

  3. Where the market for the product is small and local

  4. All of above

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Correct Option: D

In case of sole proprietorship there is a _______ between _________.

elements of business sole trade meaning, features and merits of sole proprietorship sole proprietorship - meaning & features formation, characteristics, merits & demerits and objectives of sole proprietorship

  1. Direct link, effort and reward

  2. Indirect link; Profit and loss

  3. Direct link; Profit and loss

  4. Indirect link; effort and reward

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Correct Option: A

Which of following is advantages (A) and which is disadvantage (D) of sole proprietorship form of business?
(i) Maintenance of business secrets
(ii) Limited capital
(iii) Quick decision and prompt action
(iv) Lack of continuity
Select the correct answer from the options given below.

elements of business sole trade meaning, features and merits of sole proprietorship sole proprietorship - meaning & features formation, characteristics, merits & demerits and objectives of sole proprietorship

  1. $(i) - A, (ii) - A, (iii) - A, (iv) - A$

  2. $(i) - D, (ii) - D, (iii) - D, (iv) - D$

  3. $(i) - A, (ii) - D, (iii) - A, (iv) - D$

  4. $(i) - D, (ii) - A, (iii) - D, (iv) - A$

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Correct Option: C

Sole proprietorship form is not suitable _____________________.

elements of business sole trade meaning, features and merits of sole proprietorship sole proprietorship - meaning & features formation, characteristics, merits & demerits and objectives of sole proprietorship

  1. Where capital requirement is large and risk involvement is heavy

  2. Where manual skill is required

  3. Where the market for the product is small and local

  4. All of above

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Correct Option: A

Sole proprietorship form is most suitable : __________.

elements of business sole trade meaning, features and merits of sole proprietorship sole proprietorship - meaning & features formation, characteristics, merits & demerits and objectives of sole proprietorship

  1. Where the market for the product is small and local

  2. Where customers are given personal attention, according to their personal tastes and preferences

  3. Where capital requirement is small and risk involvement is not heavy

  4. All of above

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Correct Option: D

Sole trader starts his/her business with an objective of earning independent livelihood using his/her skills.

elements of business sole trade meaning, features and merits of sole proprietorship sole proprietorship - meaning & features formation, characteristics, merits & demerits and objectives of sole proprietorship

  1. True

  2. False

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Correct Option: A
Explanation:

Sole trader starts his/her business with an objective of earning independent livelihood using his/her skills- this is a true statement. Sole traders operate mostly on a small-scale basis and their number is large. Sole trader can be referred as the single individual who takes all initiatives and run the business. 'Sole' means singe and 'proprietorship' means ownership.

Arrange the following steps in formation of Sole Proprietorship, in correct order.

  1. Obtaining required License for business
  2. Discussion about business
  3. Starting the business
  4. Arrangement of Financial resources

elements of business sole trade meaning, features and merits of sole proprietorship sole proprietorship - meaning & features formation, characteristics, merits & demerits and objectives of sole proprietorship

  1. 2,1,4,3

  2. 1,2,3,4

  3. 1,4,2,3

  4. 1,3,2,4

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Correct Option: A

Sole Proprietorship business is suitable for _________.

elements of business sole trade meaning, features and merits of sole proprietorship sole proprietorship - meaning & features formation, characteristics, merits & demerits and objectives of sole proprietorship

  1. Artistic work

  2. Personalized services

  3. Perishable goods that are sold in local markets

  4. All of the above

Show answer
Correct Option: D
Explanation:
In sole proprietorship type of business the single individual takes all initiatives and run the business. 'Sole' means singe and 'proprietorship' means ownership. The business organization in which the single owner owns, manages and controls all the activities of the business is known as sole proprietorship form of business organization. Sole Proprietorship business is suitable for:
a) Artistic work
b) Personalized services
c) Perishable goods that are sold in local markets.