On : Evolution and Fundamentals of Business

Q.1. “Amrut” is a NGO operated in the district of Rajkot since 2005. It deals in providing
medicines and other medical facilities to the rural, backward and below poverty line people
in the district. In case of need, arrangements are made by the NGO to shift critical patients
to referred hospitals.
Name the type of human activities performed by the NGO “Amrut”.
(a) Economic Activities (b) Non-Economic Activities
(c) Spiritual Activities (d) None of the above
Q.2. The occupation in which people work for others and get remunerated in return is known as
(a)Business (b) Profession (c) Employment (d) None of these
Q.3. Ruchi is a practicing Chartered Accountant. She has her C.A. Firm at Hyderabad, Telangana.
She deals in providing Income Tax and GST related services to her clients against very
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reasonable consultancy fees. She has her own professional coaching classes for C.A. Enrolled
Students.
Identify the types of economic activities performed by Ruchi as referred in the above case.
(a)Business (b) Profession (c) Employment (d) None of the above
Q.4. Dell Inc is a company involved in manufacturing of Computer and related items. It’s
a very popular name among the computer savvy youth in India. There are different
models of Desktop, Laptop, Tabs, Gaming and Workstations manufactured and sold
by the company in the Indian market.
Which type of Industry highlighted in the above case?
(a) Genetic Industry (b) Extractive Industry
(c) Processing Industry (d) Assembly Industry
Q.5. JPMG is one of the largest transportation industry in India provides services for
different projects including residential, commercial office, retail, industrial, logistics,
hospitality and other areas too. It’s a familiar name among the business houses in
the country because of the large dependency factor.
Which type of Industry discussed in the above case?
(a) Genetic Industry (b) Tertiary Industry
(c) Processing Industry (d) Assembly Industry
Q.6. Nutan General Store is a big businessman deals in selling Nestle products in his
locality. He purchased products of Nestle directly from the State Distributor in bulk
quantities and sold in the market. Small shopkeepers from different corners of the
city. Identify the type of trade followed by Nutan General Store.
(a) Wholesale Trade (b) Retail Trade
(c) International Trade (d) Entrepot Trade
Q.7. Surinder is a small-town businessman deals in buying and selling different fast-
moving consumer goods. The scope of business is limited to his local market. He
purchased different types of goods from the wholesaler each weekend located at
the State Capital.
Identify the type of trade followed by the businessman referred in the above case.
(a) Wholesale Trade b) Retail Trade
(c) International Trade (d) Entrepot Trade
Q.8. An Indian company deals in a type of trade in which it purchases (imports) Rubber
from Thailand and sells the same to another company of Japan. Company is earning
good volume of profit from its trade.
Identify the type of trade followed by the company as discussed in the above case.
(a)Wholesale Trade (b)Retail Trade (c)International Trade (d)Entrepot Trade
 Q.9. Banking, Insurance, Transportation, Warehousing, Communication and Advertising
help in elimination of hindrances of place, time, money, risk and information
occurred during the course of business. These are popularly termed as
(a) Trade (b) Employment(c) Commerce (d) Auxiliaries to Trade
Q.10. Which of the following is/are treated as Auxiliaries to Trade?
(a)Banking (b)Insurance (c)Transportation (d)All of the above
Q.11. The industries which provide support services to other industries are known as
(a) Primary industries (b) Secondary industries
(c) Commercial industries (d) Tertiary industries
Q.12. Cyclone caused lots of damages to the street vendors and retail stores in the
state. Rahim, owner of a Grocery Shop suffered a lot because of cyclonic
effect. Government declared a relief package to the affected people of the affected
areas. Identify the type of risk caused to the Shopkeepers highlighted in the above
case.
(a)Natural Cause (b)Human Cause (c)Economic Cause (d)None of the above
Q.13. The possibilities of inadequate profits or even losses due to uncertainties are known
as
(a) Business contingencies (b) Business risks
(c) Business ventures (d) None of these
Q.14. Which of the following does not characterize business activity :
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(a) Production of goods and services (b) Presence of risk

(c) Sale or Exchange of goods and services (d) Salary or wages.
Q.15. Which of the following cannot be classified as an objective of business?
(a)Investment (b) Productivity (c) Innovation (d) Profit Earning.
Q.16. Specialized knowledge and skill is needed in:
(a)Employment (b)Non-Economic activity (c)Profession (d)None of these.
Q.17. The reward of risk is:
(a)Success (b)Failure (c)Profit (d)Loss
Q.18. It is not included in code of conduct of employment:
(a)Rules (b) Dishonesty (c) Integrity (d) Morality
Q.19. Which of the following cannot be classified as an auxiliary to trade?
(a)Mining (b) Insurance (c) Warehousing (d)Transport.
Q.20. Business risk is not likely to arise due to:
(a) Change in govt, policy (b) Good management
(c) Employee dishonesty (d) Power failure.

Q.21. Armaan is very fond of playing indoor games, so he requested his father to buy him
some indoor games. His father sold his old laptop on OLX.com and bought him a
new PlayStation from Cromaelectronix.com. Can the transaction by Armaan’s
father to sell the laptop be termed as a business transaction? Name the related
feature of the business to support your answer.

Q.22. GMR Industries entered the airport space in the early 2000s and is today counted
among the top 5 airport private airport developers and operators globally. GMR
Industries presently owns and operates Delhi International Airport and Hyderabad
International Airports. Apart from being the largest private airport company in
India, GMR Industries is the only Indian airport developer to have developer to
have developed and operated airports outside India.
Identify the types of industry and its category being discussed in the above case.

Q.23. Sunstar Steel Ltd., a leading manufacturer of iron and steel decided to open up a
new branch in a remote area in Rajasthan. So that unemployed youth from the rural areas
could get same opportunities as those available in the urban areas. This initiative has
raised the standard of living of people in rural areas. All children in these families
are getting good education and these families are also actively contributing to
nation building process through their dedicated work.
 On the basis of the given information about Sunstar Steel Ltd., answer the
following questions:
(a) Identify and explain the objective of business which is followed by the company.
(b) Explain one other objective which the company should follow apart from objective identified in
part (a).
Q.24. Ratan after doing his B.Pharma degree from a reputed government college started two chemist shops in
two different localities of his home town. Encouraged with the success of these shops, he
started six more shops in different cities of the state. His strategy was to cut price, focus on
lower and middle class patients and open shops near hospitals. He earned good profit
margins. But the staff of the shops did not give much attention to the customers. Because of
this mis-management he started incurring huge losses and his business failed.
On the basis of the given information about Ratan, answer the following questions:
(a) Identify and explain the main cause behind the business failure of Ratan.
(b) Explain any two other causes of risk associated with Ratan’s business.
Q.25. Differentsituationsaboutdifferentbusinessarebeingelaboratedbelow:
i. Raghun and Biswash had a match stick factory in Indonesia which got destructed by
the recent earth quake.
ii. Rajiv Menon, a senior manager in a telecom company shared confidential information
about the company with a competitor which led to huge losses for the company.
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iii. Ready fone Co. was charged with evasion of tax and asked to pay fine in crores which
would lead to heavy losses for the company.
iv. Type writers becoming redundant due to invention of personal computers.
On the basis of the given information about different business, answer the following questions:
a) Which characteristic of business is being highlighted in the above situations?
b) Identify the different causes of concept identified in part(a) from the above information?
On : Forms of Business Organization

Q.1. Ajeet started its Travel Agency in the year 2000 by taking a small room on Rent in Delhi. He
invested money and efforts to build his business. Quality and timely services provided by his
Travel Agency made him popular in Delhi.
Name the form of business organization owned and operated by Ajeet.
(a) Partnership (b) One Person Company
(c) Joint Venture (d) Sole Trading Concern
Q.2. After completing high studies in Hotel Management courses from one of the highly reputed
Hotel Management Institutes of India, Mahesh decided to start his own Bakery at his home
town. His father arranged funds and supported him to commence his business. He recruited
some staffs, purchased required equipments and machineries. Within few months, he
started manufacturing bakery products in the market and sold at reasonable prices. His
quality products and reasonable prices helped him in making good profit.
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Identify the form of business organization highlighted in the above case.

(a) Company (b) Joint Hindu Family Business
(c) Sole Trading concern (d) Partnership
Q.3. Amandeep involves in selling School and College Uniforms at his retail outlet located at
Ambala. It is his family business, now controlled and managed by him. In the Covid–
19 period, schools and colleges are mostly closed all around the state. Due to this pandemic
situation, he records a very little business of ignorable volume. He is paying staff salaries,
electricity bills and other fixed expenses each month. He is facing huge financial losses
because of Covid -19 and its effects.
Which features of sole trading business is highlighted in the above case?
(a) Easy Formation (b) Profit (c) Secrecy (d) Risk and Uncertainties
Q.4. Mehul was a Book Shop owner at Ludhiana, Punjab. He purchased school and college books
of different publishers and sold in the market. He was quite successful in his business and
earning good profit. Last month, he passed away due to Cardiac Attack. His only son is
settled at Paris and not interested to return back. Book Shop of Mehul was closed since his
death and will remain so.
Which features of sole trading business is highlighted in the above case?
(a) Easy Formation (b) Profit
(c) Secrecy (d) Lack of business continuity
Q.5. Md. Sameer is an emerging entrepreneur from Hyderabad deals in selling of Electrical
Appliances. He received a profitable offer to purchase a retail outlet adjacent to his
showroom. But he refused very politely due to constraints of funds. It could be seen as a lost
opportunity for him.
Which limitation of sole trading business is highlighted in the above case?
(a) Limited Resources (b) Lack of managerial ability
(c) Unlimited liability (d) Lack of Perpetuity
Q.6. Rakesh and Rajesh are two close friends decided to take franchise of Tata Sky. Both of them
invested equally to get the franchise for their home district. It was agreed mutually among
Rakesh and Rajesh to share the profits or losses of the firm on equal basis.
Name the form of business organizations run by the friends referred in the abov case.
(a) Partnership (b) One Person Company (c )Joint Venture (d) Sole Trading Concern
Q.7. Ram, Sameer and Joseph are partners in a partnership firm. They are sharing profits and
losses at a ratio of 2:2:1. A dispute arises among them on a particular issue related to
transferring of interest of Ram’s share to his brother Shyam.
Sameer and Joseph refuse to accept the proposal of Ram for transferring his share in the
firm business to Shyam.
 Identify the limitations of partnership firm highlighted in the above case.
(a) Limited Resources (b) Unlimited Liability
(c) Lack of Public Confidence (d) Non-transferability of Interest
Q.8. Amar, Biraj, Sachin, Rohit and Ishant have decided to start a partnership to complete a
specific project within 02 years. It has been unanimously decided among them to contribute
equally towards meeting the budgeted expenditures of the project and to share profits or
losses equally. As per the agreement, partnership business will come to an end on
completion of the project.
Which type of partnership referred in the above case?
(a) Partnership at will (b) Particular Partnership
(c) General Partnership (d) Limited Liability Partnership
Q.9. Sudhanshu is an active partner in a partnership firm, where, liability of partners is unlimited.
Partners are allowed to participate in the management of the firm business. All the partners
are abided by the rules framed in the partnership.
Registration of partnership firm is optional and the firm business may come to an end on the
event of death, insolvency and lunatic of any partner. Which type of partnership referred in
the above case?
(a) General Partnership (b) Partnership at will
(c) Limited Liability Partnership (d) Particular Partnership
Q.10. Liability of partners in a partnership business is generally of unlimited nature. But Neha
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joined a partnership firm in the year 2018 as a partner. As per the provisions of the firm she
joined, liability of the partners is limited and its firm name consists of a specific word LLP in
it. Which of the following types of partnership referred in the above case?
(a) Partnership at will (b) Particular Partnership
(c) General Partnership (d) Limited Liability Partnership
Q.11. Ramesh is presenting himself as partner of ABC Associates through his conduct or behaviour.
Clients dealing with the firm accept him as a partner due to his self acclaimed attitude of
being a partner of the firm.
Which type of partner Mr. Ramesh is referred in the above case?
(a) Active Prater (b) Sleeping Partner
(c) Secret Partner (d) Partner by Estoppel
Q.12. Randaxy Associates is a reputed partnership firm located at New Delhi. Firm provides
different professional services related to legal matters to its clients. As per the annual report
of the firm, there is a partner enjoying a specific portion of profit but no information about
the partner is available on record.
Identify the type of partner with undisclosed personal information mentioned in the above
case.
(a) Active Prater (b) Sleeping Partner
(c) Secret Partner (d) Partner by Estoppel
Q.13. Mr. Kishor Majoomdar is running his family business at Kolkata, West Bengal. He is the
eldest member of his family. Both male and female members are allowed to participate in
their business. But Kishor ji always remain the power center and sole authority in controlling
and regulating business. Name the form of business organizations run by the friends
referred in the above case.
(a) Partnership (b) One Person Company
(c) Joint Hindu Family Business (d) Sole Trading Concern
Q.14. The objects of the company are specified by
(a) Articles of Association (b) Memorandum of association
(c) Prospectus (d) Certificate of Incorporation
Q.15. A Joint Hindu Family business runs by Mr. Sachin Agarwal, in Hyderabad, Telangana. In a
centralized management environment, he is operating and managing all business activities
as the Eldest Member of the family. How Mr. Sachin should be designated or recognized in
the family business?
(a) Elder Member (b)Karta (c)Coparcener (d) Partner
 Q.16. A group of Female Households of a rural village of Odisha decided to start their personal
group. The main intention of forming the group was to help their members in building their
houses or procuring lands at reasonable costs. They gave a name “Mallhar” to their group. It
dealt in building flats or providing plots to their members. Members were asked to pay off
their loan amount in easy installments. In certain cases, group helped its members in
purchasing flats or plots by arranging loans from commercial banks or financial institutions.
Name the form of business organizations run by the friends referred in the above case.
(a) Partnership (b) One Person Company
(c) Joint Hindu Family Business (d) Housing Cooperative Society
Q.17. The maximum amount up to which a company can issue capital, is called
(a) Authorized Capital (b) Called Up Capital
(c) Issued Capital (d) Subscribed Capital
Q.18. Which of the following is not a clause of memorandum of association?
(a) Capital clause (b) Objects clause
(c) Director clause (d) Name clause
Q.19. Which of the following is not the consequence of non-registration of a partnership firm?
(a) The firm can’t file a suit against third parties.
(b) The firm can’t file a case against the partners.
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(c) The firm can’t contribute in business legally.

(d) A partner of an unregistered firm cannot file a suit against the firm or other
partners.
Q.20. Which of the following statement is not correct?
(a) A company can refer Table A if it does not prepare its articles of association.
(b) A private limited company can have maximum 200 members.
(c) A minor as a partner can inspect the books of the firm.
(d) One-person company is a company, which has one person as its member.

Q.21. A group of eight people decided to make a company and hence approached Foresight
Business Consultants, a professional unit for seeking appropriate advice. This company
helped them in identifying the different business opportunities and suggested to set up a
mobile manufacturing company. Before converting this business opportunity into a real
project, Foresight Business Consultants made certain arrangements for conducting technical
and professional accountants, lawyers and engineers.
On the basis of the given information about, answer the following questions:
a) What are these groups of eight people called as?
b) Identify and explain the functions performed by them in aforesaid situation for the
formation of company.
Q.22. Deepak and Gaurav joined the prestigious law university in Ahmedabad in the year 2010.
During the course of the study they became good friends and they both realized that their
common interest lies in the field of corporate law. After completion of their degree they
decided to start a firm of their own, namely ‘Corpo Law Firm’ wherein both of them will be
co-owners dividing the profit and loss. After successfully running the firm for a year, they
realized that there are certain rights which are denied to their firm as it is not registered.
Explain the consequences of non– registration of their firm.

Q.23. Akshay is a shareholder in a company holding 2000 shares of Rs.10 each on which he has
already paid Rs.7 per share. What will be his liability in the event of company’s failure to pay
debts? Give reason in support of your answer.

Q.24. Mohan and Radha want to start a shop to sell Rajasthani sweets. They did not know how to
develop the agreement for this purpose. So, they approached a Chartered Accountant who
advised them to prepare a document which may stipulate the terms and conditions of the
agreement. On the basis of given information, answer the following questions:
a) NamethedocumentaboutwhichthecharteredaccountantadvisedMohanandRadha.
 b) State any four important items they should include in the agreement other than
name, nature and place of business.

Q.25. Ajay is the sole owner of a shoe manufacturing factory. He took a loan of Rs.20 lakhs from
Ace finance company for the expansion of his business. Because of continuous losses however, he
was not able to repay the loan on time. Assets of the business were not enough for repaying
liabilities in full. As a result, the finance company asked him to repay their loan. He refused to do so
on the ground that the loan was taken by his business and not by him for his personal use. The
company filled a case against him. The court gave decision in favor of the company on the ground
that Ajay was operating as the sole proprietor and a sole proprietor did not have separate entity
distinct of his own. The court further stated that Ajay had unlimited liability and held him liable to
repay the loan even by selling his personal property, if need be. Identify and explain two features of
the form of business organization formed by Ajay by quoting the lines from the case.
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( Any one topic on A3 Size sheet )

• Prepare Collage of Various persons involved in Different Economic and Non
Economic Activities
• Draw a Chart on Types of forms of Business Organisations
• Prepare Mind Map on Trade and Auxiliaries to Trade
• Prepare Mind Map on Types of Industries
• Prepare Skit explaining types of Partners

EXTRA PRACTICE
Solve all Objective Type Questions in Text Book and practice Competency
Based Questions.