Introduction To Business MCQs | MGT211 MCQs | Set 1
Introduction To Business MCQs | MGT211 MCQs | Set 1
MCQs (Multiple Choice Questions)
1) Following are the advantages of a cooperative society except:
a) Increase in employment
b) Lack of profit incentive
c) Friendly relation
d) All of the above
Correct Answer:
The correct answer is 'b'.
Explanation:
A cooperative society is an organization where individuals voluntarily come together to pool their resources, skills, and efforts for their mutual benefit. The primary aim of a cooperative society is not to maximize profits, unlike traditional for-profit businesses. Instead, it focuses on meeting the needs and interests of its members while maintaining a fair and cooperative environment.
Let's go through the options to understand why:
a) Increase in employment - This is generally an advantage of a cooperative society. By working together and pooling resources, cooperative societies can create job opportunities within the community.
b) Lack of profit incentive - This is actually an advantage of cooperative societies. Unlike traditional businesses, where the main goal is often to generate maximum profits for shareholders, cooperatives prioritize the well-being and satisfaction of their members.
c) Friendly relation - This is also considered an advantage of cooperative societies. Since the members are working together for their mutual benefit, there is often a sense of camaraderie and a friendly atmosphere within the cooperative.
d) All of the above - This is the option that is NOT an advantage of a cooperative society. The correct answer to the question is that "d) All of the above" is not an advantage of a cooperative society because it includes "Lack of profit incentive," which is actually an advantage.
In summary, cooperative societies offer advantages such as promoting employment, fostering friendly relations among members, and prioritizing member satisfaction over purely profit-driven motives.
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2) In Franchising, who sells the rights to other party:
a) Franchisee
b) Franchiser
c) Manager
d) All of the above
Correct Answer:
The correct answer is 'b'.
Explanation:
In franchising, the term "franchiser" refers to the party that sells the rights to operate a business using its established brand, products, and business model to another party. The party that buys these rights and operates the business is called the "franchisee."
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3) Trade or exchange of goods and services between two or more independent countries for their mutual advantages is called:
a) Wholesale Trade
b) Retail Trade
c) Foreign Trade
d) None of the Above
Correct Answer:
The correct answer is 'c'.
Explanation:
Foreign trade, also known as international trade, refers to the exchange of goods and services between two or more independent countries. This trade occurs for their mutual advantages, which can include access to products that a country may not produce domestically, increased economic growth, and enhanced international relations.
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4) In ------------ a central body will allocated the resources and then decide how these resources will be distributed.
a) Free Economy
b) Mixed Economy
c) Planned Economy
d) None of the above
Correct Answer:
The correct answer is 'c'.
Explanation:
In a planned economy, also known as a command economy or centrally planned economy, a central authority or governing body, typically the government, plays a significant role in allocating resources and determining how those resources will be distributed among various sectors and activities within the economy. This central authority makes decisions about production, distribution, and pricing of goods and services based on a predetermined plan.
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5) First directors are usually named in the __________:
a) Memorandum of Association
b) Articles of Association
c) Prospectus
d) None of the above
Correct Answer:
The correct answer is 'a'.
Explanation:
The "Memorandum of Association" is a legal document that serves as the foundation or constitution of a company. It outlines the fundamental principles, objectives, and scope of activities that a company intends to undertake. The memorandum is an important document submitted during the process of company formation and registration.
In the context of company formation, the first directors of a company are usually named in the "Memorandum of Association." These directors are individuals who are responsible for the initial setup and management of the company before it is fully operational. They play a significant role in the early stages of the company's existence.
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6) Goods produced domestically and sold in some other country.
a) Import
b) Export
c) Tariff
d) Quota
Correct Answer:
The correct answer is 'b'.
Explanation:
Export refers to the act of producing goods or services within one's own country and selling or sending them to another country for consumption or use. It is an integral part of international trade and plays a significant role in a country's economy.
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7) For a public limited company, minimum number of members are :
a) 2
b) 5
c) 7
d) 10
Correct Answer:
The correct answer is 'c'.
Explanation:
A public limited company, often abbreviated as PLC, is a type of business entity where ownership is divided into shares and shares are traded on a public stock exchange. It's a company that has a separate legal existence from its owners (shareholders) and can raise capital by issuing shares to the general public.
In the context of the minimum number of members required for a public limited company, the answer is c) 7. This means that a public limited company must have a minimum of 7 members (shareholders) to be legally formed and registered. These members collectively provide the initial capital and become shareholders in the company.
It's important to note that these minimum requirements can vary by jurisdiction, so it's always advisable to check the specific regulations and laws in the country where the company is being registered.
In summary, a public limited company is required to have a minimum of 7 members (shareholders) to be legally established. This minimum number is intended to ensure a level of collective ownership and participation in the company's operations and governance.
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8) People in business and government face important ethical issues and decisions.
a) Only in the United States
b) Primarily in capitalist countries
c) Primarily in communist countries
d) In many different countries around the world
Correct Answer:
The correct answer is 'd'.
Explanation:
Ethical issues and decisions are not confined to a specific country, economic system, or political ideology. They are a universal concern that people in various professions, including business and government, face all around the world. Ethics, which refer to moral principles that guide behavior, play a crucial role in decision-making processes, regardless of the country's economic or political structure.
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9) Annual General Meeting is the meeting of the company that held:
a) Each quarter
b) After 6 months
c) Once a year
d) None of the above
Correct Answer:
The correct answer is 'c'.
Explanation:
An "Annual General Meeting" (AGM) is a meeting that a company
holds to fulfill legal and regulatory requirements, as well
as to provide an opportunity for its shareholders and
directors to discuss important matters related to the
company's performance,
financials, and future plans.
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10) Partners will have to pay all the debts of the business even from their personal property.
a) Limited Liability
b) Unlimited Liability
c) Both
d) None of the above
Correct Answer:
The correct answer is 'b'.
Explanation:
In the context of business partnerships, liability refers to the legal obligation or responsibility to pay off debts and obligations of the business. Unlimited liability means that the partners in a business are personally liable for all the debts and liabilities of the business. This means that if the business cannot meet its financial obligations, the partners are legally obligated to use their personal assets, including their personal property and wealth, to cover the debts.
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