Introduction To Business MCQs | MGT211 MCQs | Set 10
Introduction To Business
MCQs | MGT211 MCQs | Set 10
MCQs (Multiple Choice Questions)
1) An agreement between two parties in which one party possess the rights to the other party is :
a) Partnership
b) Strategic Alliance
c) Joint venture
d) Franchising
Correct Answer:
The correct answer is 'd'.
Explanation:
In franchising, a franchisor grants the right to the franchisee to use its business model, brand name, and operating procedures in exchange for a fee. The franchisor retains ownership of the business concept and trademarks, and the franchisee is responsible for the day-to-day operations of the business.
In a partnership, two or more people agree to share ownership of a business. In a strategic alliance, two or more businesses agree to cooperate on a specific project or activity. In a joint venture, two or more businesses agree to create a new business together.
So, the only option that is an agreement between two parties in which one party possesses the rights to the other party is franchising.
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2) Portion of the undistributed profit transferred to which of the following?
a) General Reserve
b) Retained Earning
c) Appropriation account
d) All of the given options
Correct Answer:
The correct answer is 'd'.
Explanation:
Undistributed profit is the profit that is not distributed to shareholders as dividends. It can be transferred to general reserve, retained earnings, or appropriation account.
General reserve: A general reserve is a reserve that is created to meet unforeseen circumstances, such as a financial crisis or a natural disaster.
Retained earnings: Retained earnings are the profits that are kept by the company and not distributed to shareholders. They can be used to finance future growth or to pay for unforeseen expenses.
Appropriation account: An appropriation account is a reserve that is created for a specific purpose, such as funding a new project or paying for employee bonuses.
The portion of the undistributed profit that is transferred to each of these accounts will depend on the company's specific circumstances and objectives.
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3) Brief history, Auditor’s report, shareholders’ equity and liabilities, share capital, etc are mention in which of the document?
a) Charter of Company
b) Article of Association
c) Prospectus
d) None of the given option
Correct Answer:
The correct answer is 'b'.
Explanation:
The article of association is a legal document that sets out the rules and regulations of a company. It includes information about the company's name, registered office, share capital, and management structure. The article of association also includes information about the company's auditors and the procedures for calling and conducting meetings of shareholders.
The charter of a company is a document that grants the company its legal existence. It is issued by the government or other regulatory authority. The charter does not contain any information about the company's operations or management structure.
The prospectus is a document that is issued by a company when it is raising capital. It provides information about the company's business, its financial performance, and its management team. The prospectus is intended to help investors make informed decisions about whether to invest in the company.
So, the only option that mentions brief history, Auditor’s report, shareholders’ equity and liabilities, share capital, etc is the article of association.
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4) A joint stock company may be wound up voluntarily in which of the following way:
a) Expiry of Period
b) Fails to submit statutory report
c) Fails to start its business within one year from the date of incorporation
d) All of the following
Correct Answer:
The correct answer is 'd'.
Explanation:
A joint stock company may be wound up voluntarily in the following ways:
Expiry of period: If the company's articles of association specify a period of time for which the company is to exist, and that period expires, the company may be wound up voluntarily.
Failure to submit statutory report: If a company fails to submit its statutory report to the Registrar of Companies within the time required, it may be wound up voluntarily.
Failure to start business: If a company fails to start its business within one year from the date of incorporation, it may be wound up voluntarily.
Resolution of the company: The company may be wound up voluntarily by a resolution of the shareholders.
Court order: The court may order the winding up of a company if it is satisfied that it is in the best interests of the company or its creditors.
So, a joint stock company may be wound up voluntarily in any of the above ways.
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5) Capital is required for the purchase of land, machines, wages and raw materials. A businessman can generate its capital from:
a) Debt
b) Equity
c) None of the above
d) All of the given option
Correct Answer:
The correct answer is 'd'.
Explanation:
A businessman can generate capital from debt and equity.
Debt: Debt is money that is borrowed from a lender, such as a bank or a financial institution. It is typically repaid with interest over a period of time.
Equity: Equity is money that is invested in a business by the owners. It is not repaid, but it gives the owners a share of the profits and assets of the business.
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6) Cooperative Societies are not formed for:
a) The serving of orphans and widows
b) The help of poor people
c) For the earning of profit
d) Social welfare
Correct Answer:
The correct answer is 'c'.
Explanation:
Cooperative societies are formed to help their members achieve common economic, social, and cultural needs. They are not formed to earn profit.
The main objectives of cooperative societies are:
- To provide goods and services to their members at a fair price.
- To help their members improve their standard of living.
- To promote self-help and mutual assistance among their members.
- To encourage thrift and savings among their members.
- To provide education and training to their members.
- To promote social welfare activities in their communities.
So, cooperative societies are not formed to earn profit. They are formed to help their members achieve common economic, social, and cultural needs.
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7) Which of the following is the source of acquiring of redeemable capital?
a) Mudarbah Certificate
b) Debentures
c) Participation Term Certificates
d) All of the given option
Correct Answer:
The correct answer is 'd'.
Explanation:
Redeemable capital is a type of capital that can be repaid to the investor. It can be acquired through the issuance of mudarabah certificates, debentures, or participation term certificates.
Mudarabah certificates: Mudarabah certificates are a type of Islamic investment certificate. They represent a share in a mudarabah (profit-sharing) investment. The investor receives a share of the profits from the investment, but does not have any liability for losses.
Debentures: Debentures are a type of loan that is issued by a company. They are typically secured by the company's assets. The investor receives a fixed interest payment on the debentures, and the principal is repaid at the end of the term.
Participation term certificates: Participation term certificates are a type of Islamic investment certificate. They represent a share in a musharakah (joint venture) investment. The investor receives a share of the profits and losses from the investment.
So, all of the options listed are sources of acquiring redeemable capital.
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8) Which one of the following statements about marketing is inaccurate?
a) The growing number of products in all categories has made it easier for marketers to capture the attention of customers.
b) Marketing has to do with persuading customers a product meets their needs.
c) The mass market has fragmented into many different groups of customers.
d) Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers
Correct Answer:
The correct answer is 'a'.
Explanation:
The statement is inaccurate because the growing number of products
in all categories has made it harder for marketers to capture
the attention of customers. This is because there are so many
competing products and brands, and it is difficult to stand out
from the
crowd.
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9) The process of tracking the demand and satisfaction of customers in an effort to develop products they will want to buy on an ongoing basis is called ________.
a) Marketing
b) Business vision
c) Product development
d) Customer relationship management
Correct Answer:
The correct answer is 'd'.
Explanation:
Customer relationship management (CRM) is a business strategy that focuses on managing a company's interactions with its customers. It involves tracking customer demand and satisfaction in order to develop products that they will want to buy on an ongoing basis.
CRM is a broad term that can encompass a variety of activities, such as:
Customer service: This involves responding to customer inquiries and complaints, and resolving any issues they may have.
Sales: This involves identifying and qualifying potential customers, and then closing deals.
Marketing: This involves developing and executing marketing campaigns that target the company's target audience.
Data analysis: This involves collecting and analyzing customer data in order to gain insights into their needs and preferences.
CRM is a valuable tool for businesses of all sizes. By understanding their customers and their needs, businesses can develop products and services that meet those needs and keep customers coming back for more.
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10) ________ is the typical sequence of changes in demand for a product that occurs over time.
a) The business vision statement
b) The product life cycle
c) Marketing research
d) A customer-oriented approach
Correct Answer:
The correct answer is 'b'.
Explanation:
The product life cycle is the typical sequence of changes in demand for a product that occurs over time. It is divided into four stages: introduction, growth, maturity, and decline.
Introduction: This is the stage when the product is first introduced to the market. Demand is typically low during this stage, as consumers are not yet aware of the product.
Growth: This is the stage when demand for the product begins to grow. This is due to increasing awareness of the product and positive word-of-mouth.
Maturity: This is the stage when demand for the product reaches its peak. This is due to the fact that most of the potential customers have already purchased the product.
Decline: This is the stage when demand for the product
begins to decline. This is due to a number of factors, such
as competition from new products or changes in consumer
tastes.
The product life cycle can vary depending on the product and the market. Some products, such as fads, may have a very short life cycle. Other products, such as household staples, may have a very long life cycle.
By understanding the product life cycle, businesses can make
better decisions about how to market and sell their
products. For example, businesses may want to invest more
heavily in
marketing during the introduction stage, when demand is
low. They may also want to focus on product innovation
during the maturity stage, when demand is starting to
decline.
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