Tag: formation, characteristics, merits & demerits and objectives of sole proprietorship

Questions Related to formation, characteristics, merits & demerits and objectives of sole proprietorship

The fate of sole proprietorship is connected to the sole proprietor. What does this convey about the 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. Unlimited liability

  2. Uncertain life

  3. Limited managerial ability

  4. Lack of economies of scale

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Correct Option: B
Explanation:

The fate of sole proprietorship is connected to the sole proprietor. This conveys about uncertain life about the sole proprietorship. 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.

______ is a popular form of business organisation and is the most suitable form for small businesses.

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

  1. Partnership

  2. Sole proprietorship

  3. Joint stock Company

  4. Statutory Corporation

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Correct Option: B
Explanation:

Sole proprietorship is a popular form of business organization and is suitable form of small business. 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.

Identify the limitation of sole trading concern from the following.

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

  1. Sense of accomplishment

  2. Ease of formation and closure

  3. Limited liability

  4. Decision making may not be balanced in all the cases.

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Correct Option: D
Explanation:

The main disadvantages to being a sole proprietorship are: Unlimited liability: Your small business, in the form of a sole proprietorship, is personally liable for all debts and actions of the company. Unlike a corporation or an LLC, your business doesn't exist as a separate legal entity.

A business started by only one person is called________.

business organisation and correspondence 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. Sole proprietorship

  3. Trust

  4. Society

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Correct Option: B

Statement A : Easy to form is advantage of sole proprietorship form of business.
Statement B: Easy to wind up is advantage of sole proprietorship form of business.

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

  1. Statement A is true but Statement B is false

  2. Statement A is false but Statement B is true

  3. Both Statement A and B are true

  4. Both Statement A and B are false

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Correct Option: C

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

business organisation and correspondence 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

Sole proprietorship form is most suitable ____________.

business organisation and correspondence 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

Which of following form of business is the most simple and common in our country?

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

  1. Statuary corporations

  2. Sole proprietorship

  3. Company

  4. All of above

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Correct Option: B

In case of sole proprietorship there is a _____ between ________.

business organisation and correspondence 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

Sole proprietorship form is most suitable ___________.

business organisation and correspondence 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