Tag: sole proprietorship - meaning & features

Questions Related to sole proprietorship - meaning & features

_______ do not have to consult with other individuals to make decisions for the business, which allows them to respond quickly to changes in the marketplace.

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. Partners

  2. Customers

  3. Managers

  4. Sole traders

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Correct Option: D
Explanation:

Sole traders do not have to consult with other individuals to make decisions for the business, which allows them to respond quickly to changes in the marketplace. Sole trader do not have to file a business tax return on a company's profits and losses.
 Sole trader starts his/her business with an objective of earning independent livelihood using his/her skills. 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 trading concern is owned and managed by________person/persons.

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. one

  2. two

  3. five

  4. six

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Correct Option: A
Explanation:

A sole trading business is the oldest and simplest form of business organisation as in this kind of business, there is no chaos in the management as a person is single handedly working for the business and also he is the single receiver of profit earned.

The organisation, which is owned and managed by one person is a ________________.

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. Sole proprietorship 

  2. Joint stock company

  3. Government company

  4. All of these

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Correct Option: A
Explanation:

In sole proprietorship, whole organisation is owned and managed by the single person, who is the owner of organisation. He is the sole bearer of all risks and profits associated with the business.

A person who conducts business of sole trading concern is known as sole trader.

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:

The person who is involved in the sole trading concern is known as sole trader as he single handedly controls and manages the working of an organisation and is the sole bearer of risks and profits associated with it.

What is one of the best advantages of proprietorship?

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. Shares can be sold to raise capital

  2. Profits are to be shared

  3. The owner has independence

  4. Limited liability is enjoyed

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Correct Option: C
Explanation:

A business which is owned and managed by a single person is called as sole proprietorship. The advantages of this are:

  1. No sharing of profit.
  2. The owner is independent.
  3. Owner only makes decisions.etc.

What is one of the hardships of a sole proprietorship?

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. Capital is limited to owners savings and bank loans

  2. It has to complete too many registration formalities

  3. As they are government owned there is no profit motive

  4. More tax is charged on them

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Correct Option: A
Explanation:

A business which is owned and managed by a single person is called as sole proprietorship. As the owner is a single person he/she has limited capital with him/her to invest in the business. Hence, it is one of the hardships of a sole proprietorship. The limited capital might be due to very low internal sources of finance and/or banks or other external sources of finance will also be unavailable. 

The most suitable definition of a sole trader form of business organization is _______.

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. the business who manufacture only one product

  2. the business is owned by one person

  3. the firm has a single buyer

  4. there is a single seller is the industry

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Correct Option: B
Explanation:

A sole trading concern is a business which is owned and managed by a single person. He is the only risk taker in the business and the profit is enjoyed by himself only. Hence, the most suitable definition of a sole trader form of business organization is the business is owned by one person.

Mr. Varun wanted to start a bakery shop with limited money. What kind of business organization you would suggest him?

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. Sole proprietorship

  2. HUF

  3. Partnership

  4. Corporation

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Correct Option: A
Explanation:

A sole proprietorship is a business which is owned and managed by a single person. It consists of limited capital as there is only one person. Hence, it is a sole proprietorship form of business organization.

In relation to business organisation structure, which one of the following is easy to form and wind up?

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. A company

  2. A sole proprietorship

  3. Statutory corporation

  4. Public enterprises

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Correct Option: B
Explanation:

A sole proprietorship business requires only one person, less capital to set up. It requires very less legal formalities to establish the business as compare to a company, statutory corporation. public enterprises. Hence, sole proprietorship is easy to form and wind up.

Which one of the following does not have perpetual succession?

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. Company

  2. Statutory Corporation

  3. Sole Proprietorship

  4. Co-operative Society

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Correct Option: C
Explanation:

Perpetual succession means continuous without any stoppage. In case of a sole proprietorship there is only one person and the business comes to and end if the owner dies because he is the only owner. Hence, sole proprietorship does not have perpetual succession.