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Introduction To Business MCQs | MGT211 MCQs | Set 7


Introduction To Business MCQs | MGT211 MCQs | Set 7

MCQs (Multiple Choice Questions)

1)   On which of the following ordinance came into force:

    a)        Jan 01, 1981

    b)        Jan 01, 1984 

    c)        Jan 01, 1985

    d)        Jan 01, 1983

Correct Answer: 

The correct answer is  'd'.

Explanation:

The Karachi Development Authority (Sind Amendment) Ordinance, 1983 came into force on January 1, 1983. It was promulgated by the President of Pakistan on December 29, 1982.

The ordinance amended the Karachi Development Authority (KDA) Ordinance, 1957. The amendment gave the KDA more powers to acquire land and to develop Karachi.

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2) The two major soucres of raising funds or financing a business are:

    a)        Owners capital and borrowed funds

    b)        Short term and long terms loans

   c)      Debentures and drafts

    d)        Assets and long term loans

Correct Answer: 

The correct answer is  'a'.

Explanation:

Owners' capital is the money that the business owners invest in the business. Borrowed funds are the money that the business borrows from lenders, such as banks or investors. These are the two main sources of funding for a business.

Short-term loans and long-term loans are both types of borrowed funds. Debentures and drafts are types of financial instruments that can be used to raise funds, but they are not as common as owners' capital and borrowed funds. Assets are the things that a business owns, such as equipment, inventory, and real estate. They can be used to secure loans, but they are not a source of funding in themselves.

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3)  Which of the following industry is the type of primary industry:

    a)        Constructive industry

    b)        Manufacturing industry

    c)        Genetics industry

    d)        Service industry

Correct Answer: 

The correct answer is  'a'.

Explanation:

The primary industry is the sector of the economy that extracts raw materials from the natural environment. This includes agriculture, forestry, fishing, and mining. The constructive industry is a part of the secondary sector, which transforms raw materials into finished goods. The manufacturing industry is also part of the secondary sector, but it focuses on the production of goods from raw materials and components. The genetics
industry is part of the tertiary sector, which provides services to businesses and consumers.

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4)  _________is a kind of loan which is acquired from the market.

    a)        Dividend

    b)        Debenture

    c)        Paid up capital

    d)        None of the given options

Correct Answer: 

The correct answer is  'b'.

Explanation:

A debenture is a long-term loan that is issued by a company or government. It is a type of debt security that is not secured by any specific assets. This means that the only way for the investor to recover their money is if the company or government makes the payments as promised. Debentures are typically issued with a fixed interest rate and a maturity date.

Dividends are payments made by a company to its shareholders out of its profits. They are not a loan, but a distribution of profits to the owners of the company.

Paid up capital is the amount of money that has been invested in a company by its shareholders. It is the total amount of money that the company has raised from its shareholders. It is not a loan, but the money that the shareholders have put into the company.

So, the only option that is a kind of loan which is acquired from the market is debenture.

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5)  Population size is included in: 

    a)        Economic factors

    b)        Demographic factors

    c)        Legal factors

    d)        Technological

Correct Answer: 

The correct answer is  'b'.

Explanation:

Demographic factors are the characteristics of a population, such as the size, age structure, sex ratio, and geographic distribution. Population size is one of the most important demographic factors. It is a measure of the total number of people in a population.

Economic factors are the factors that influence the economy, such as the level of employment, the rate of inflation, and the interest rates. Legal factors are the laws and regulations that govern a society. Technological factors are the innovations and inventions that are used in a society.

So, population size is a demographic factor, not an economic, legal, or technological factor.

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6) Company policy, administration, supervision, interpersonal relations, working conditions, and salary are characterized as:

    a)        Growth factors

    b)        Hygiene factors

    c)        Esteem factors

    d)        Motivating factors

Correct Answer: 

The correct answer is  'b'.

Explanation:

Hygiene factors are job-related factors that are not directly related to the work itself, but that can nonetheless affect employee satisfaction and motivation. They include factors such as company policy, administration, supervision, interpersonal relations, working conditions, and salary.

When these factors are not adequate, they can lead to dissatisfaction and low motivation. However, when they are adequate, they do not necessarily lead to high motivation.

Motivating factors, on the other hand, are job-related factors that are directly related to the work itself. They include factors such as achievement, recognition, responsibility, advancement, and growth.

When these factors are present, they can lead to high motivation and job satisfaction.

Esteem factors are factors that relate to an employee's sense of self-worth and importance. They include factors such as recognition, responsibility, and the opportunity for advancement.

Growth factors are factors that relate to an employee's desire for learning and development. They include factors such as opportunities for training and development, and the chance to take on new challenges.

So, the factors you mentioned are hygiene factors, not growth factors, esteem factors, or motivating factors.

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7)  Which of the following must hold a statutory meeting? 

    a)        Statutory companies

    b)        Private limited companies

    c)        Public limited companies

    d)        Chartered companies

Correct Answer: 

The correct answer is  'c'.

Explanation:

A statutory meeting is a meeting of the shareholders of a company that is held within a certain period of time after the company is incorporated. It is a requirement for public limited companies, but not for private limited companies or chartered companies.

The purpose of the statutory meeting is to:

Elect the first directors of the company

Approve the company's constitution

Approve the company's accounts

Approve the payment of dividends

Discuss any other matters that the directors or shareholders may wish to raise.

The statutory meeting must be held within a period of not less than one month and not more than three months after the date at which the company is entitled to commence business.

So, only public limited companies must hold a statutory meeting.

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8)  Which of the following is NOT included in aids to trade?

    a)        Insurance 

    b)        Warehousing 

    c)        Transportation 

    d)        Foreign trade

Correct Answer: 

The correct answer is  'd'.

Explanation:

Aids to trade are the activities that facilitate the smooth flow of goods and services between countries. They include activities such as transportation, insurance, warehousing, and advertising. Foreign trade is the exchange of goods and services between countries. It is not an aid to trade, but rather the outcome of trade.

So, the only option that is not included in aids to trade is foreign trade.

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9)    The portion of capital kept at the winding up of a company for the payment of debts is known as:

    a)        Reserve capital 

    b)        Issued capital 

    c)        Subscribed capital 

    d)        Authorized capital

Correct Answer: 

The correct answer is  'a'.

Explanation:

Reserve capital is a portion of the authorized capital of a company that is not issued to shareholders. It is kept by the company and can only be used to pay off debts in the event of
liquidation.

Issued capital is the portion of the authorized capital that has been issued to shareholders. Subscribed capital is the portion of the issued capital that has been paid for by the shareholders. Authorized capital is the maximum amount of capital that a company is allowed to raise.

So, the portion of capital kept at the winding up of a company for the payment of debts is the reserve capital.

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10)  While making financial projections in a business plan, which of these would NOT form part of the plan? 

    a)        Source of loan

    b)        Audit 

    c)        Net income or profit

    d)        Expected revenues 

Correct Answer: 

The correct answer is  'b'.

Explanation:

An audit is a review of a company's financial statements by an independent third party. It is typically done to ensure that the statements are accurate and free of errors. While an audit can be helpful in providing insights into a company's financial performance, it is not a necessary part of financial projections.

Financial projections are estimates of a company's future financial performance. They typically include the company's expected revenues, expenses, and profits. The source of loan, net income or profit, and expected revenues are all important factors to consider when making financial projections.

So, the only option that would not form part of financial projections in a business plan is an audit.

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