Class 11 --- Business Studies MCQs

1. A business must earn profit for the following reasons:

(a) Survival
(b) Improves goodwill
(c) Symbol of efficiency
(d) All of the above

ANS: All of the above

2. Which one of the following combination is incorrect?

(a) Manufacturing of good - Trade
(b) Moving Goods – Transportation
(c) Informing Customers - Advertising
(d) Protection against risks – Insurance

ANS: Manufacturing of good - Trade

3. Bank of Baroda opened a new Branch in Bangalore. It is fulfilling which of the

following organisational objective?
(a) Survival
(b) Profit
(c) Growth
(d) Innovation

ANS: Growth

4. Fishing will come under which industry?

(a) Genetic Industry
(b) Extractive Industry
(c) Manufacturing Industry
(d) Tertiary Industry

ANS: Extractive Industry

5. Transfer of interest is possible in which type of economic activity?

(a) Employment
(b) Business
(c) Profession
(d) None of the above

ANS: Business

6. Which one of the following does not characterise business activity?

(a) Production or procurement of goods and services
(b) Presence of risk
(c) Sale or exchange of goods and services
(d) Earning Salary or Wages

ANS: Earning Salary or Wages

7. The business activities which provide support services to other industries are known as?
 (a) Primary Industries
(b) Secondary Industries
(c) Auxiliaries to Trade
(d) None of the above

ANS: Auxiliaries to trade

8. Which of the following cannot be classified as an objective of business?

(a) Investment
(b) Productivity
(c) Innovation
(d) Profit earning

ANS: Investment

9. Business risks are not likely to arise due to:

(a) Changes in government policy
(b) Employee’s dishonesty
(c) Power Failure
(d) Good management practices

ANS: Good management practices

10. The form of business organization in which there is separation of ownership and
management is called:
(a) Sole Proprietorship
(b) Partnership
(c) Joint Stock Company
(d) All of the above

ANS: Joint Stock Company

11. A prospectus is issued by -

(a) A private company
(b) A public company
(c) A public company seeking investment from public
(d) All of the above

ANS: A public company seeking investment from public

12. Name the form of business organisation in which members are agents and principals of
each other.
(a) Sole Proprietorship
(b) Cooperative Society
(c) Partnership
(d) Joint Hindu Family Business

ANS: Partnership
13. Who becomes Karta in Joint Hindu Family Business?
(a)Most educated member of the family
(b) Senior most male member
(c) Elected by voting of members
(d) Any member can become Karta

ANS: Senior most male member

14. The partner who only allows other partners to use his name and goodwill is called:
(a) Secret Partner
(b) Nominal Partner
(c) Sleeping Partner
(d) Active Partner

ANS: Nominal Partner

15. “Working for oneself provides personal satisfaction” Which merit of Sole Proprietorship
is highlighted in this statement?
(a) Sense of accomplishment
(b) Direct incentive
(c) Flexibility of operations
(d) Quick decision making

ANS: Sense of accomplishment

16. Which document is an invitation to the general public to subscribe to its securities like
shares and debentures?
(a) MoA
(b) AoA
(c) Prospectus
(d) Consent of Directors

ANS: Prospectus

17. This document is a conclusive evidence of legal status of a company and is like the birth
certificate of the company-
(a) Certificate of Commencement of Business
(b) Certificate of Incorporation
(c) Corporate Identity Number
(d) None of the above

ANS: Certificate of Incorporation

18. Stages in the formation of a public company are in the following order:
(a) Promotion, Commencement of Business, Incorporation, Capital Subscription
(b) Incorporation, Capital Subscription, Commencement of Business, Promotion
(c) Promotion, Incorporation, Capital Subscription, Commencement of Business
(d) Capital Subscription, Promotion, Incorporation, Commencement of Business

ANS: Promotion, Incorporation, Capital Subscription, Commencement of Business

19. Maximum number of members in a private company can be –
(a) 20
(b) 50
(c) 100
(d) 200
ANS: 200

20. Application for the approval of name of the company is to be made to:
(a) SEBI
(b) Registrar of Companies
(c) Government of India
(d) Government of state in which Company is to be registered

ANS: Registrar of Companies

21. Which form of organization is considered to be simplest form of organization?

(a) Joint Stock Company
(b) Partnership
(c) Cooperative Society
(d) None of the above

ANS: None of the above

22. Who are called the real owners of the Company?

(a) Employees
(b) Creditors
(c) Shareholders
(d) All of the above

ANS: Shareholders

23. The oldest form of organisation of public enterprises is:

(a) Statutory Corporation
(b) Departmental Undertaking
(c) Government Company
(d) Multi-national Corporation

ANS: Departmental Undertaking

24. Which one of the following statements is relevant in case of a Partnership firm?
(a) Compulsory to register a partnership firm
(b) Not compulsory to register a partnership firm
(c) Not compulsory to register a partnership firm but advisable
(d) None of the above

ANS: Not compulsory to register a partnership firm but advisable

25. Which of the following enterprise is formed as a part of government and is not a
separate legal entity?
(a) Statutory Corporation
(b) Departmental Undertaking
(c) Government Company
(d) All of the above

ANS: Departmental Undertaking

26. Which of the following public sector enterprise is formed by a special act of Parliament
which defines its powers and objectives?
(a) Statutory Corporation
(b) Departmental Undertaking
(c) Government Company
(d) All of the above

ANS: Statutory Corporation

27. The shares of Government Companies are held in the name of:
(a) Prime Minster of India
(b) President of India
(c) Directors of the Company
(d) Registrar of Companies

ANS: President of India

28. Which of the following public sector enterprise enjoys maximum financial
freedom/autonomy?
(a) Statutory Corporation
(b) Departmental Undertaking
(c) Government Company
(d) All of the above

ANS: Government Company

29. A government company is any company in which the paid-up capital held by the
Government is not less than:
(a) 49 %
(b) 51 %
(c) 50 %
(d) 25 %

ANS: 51%
30. Steel Authority of India Ltd. (SAIL) is a public sector enterprise. Identify this form of
organising public enterprises.
(a) Statutory Corporation
(b) Departmental Undertaking
(c) Government Company
(d) Multi-national corporation (MNC)
ANS: Government Company

31. Who can get an overdraft from a bank?

(a) Current Account Holder
(b) Savings Account Holder
(c) Fixed Account Holder
(d) Recurring Account Holder

ANS: Current Account Holder

32. Which type of deposit account offers maximum interest on the deposits?
(a) Current Deposit Account
(b) Fixed Deposit Account
(c) Recurring Deposit Account
(d) Multiple Option Deposit Account

ANS: Fixed Deposit Account

33. Principle of indemnity is not applicable to which insurance?

(a) Fire Insurance
(b) Marine Insurance
(c) Health Insurance
(d) Life Insurance

ANS: Life Insurance

34. The largest commercial bank of India is:

(a) Reserve Bank of India
(b) Punjab National bank
(c) State Bank of India
(d) Bank of Baroda

ANS: State Bank of India

35. It is a type of bank account in which excess of a particular limit gets automatically
transferred to fixed deposit account:
(a) Current Deposit Account
(b) Recurring Deposits
(c) Multiple Option Deposit Account
(d) Savings Account

ANS: Multiple Option Deposit Account

36. Which of the following insurance is also known as contract of assurance?
(a) Life Insurance
(b) Health Insurance
(c) Fire Insurance
(d) Marine Insurance

ANS: Life Insurance

37. Insured and Insurer must disclose material facts to each other. This is related to:
(a) Principle of Indemnity
(b) Principle of Causa Proxima
(c) Principle of Utmost Good Faith
(d) Principle of Insurable Interest

ANS: Principle of Utmost Good Faith

38. Spending more than the balance in your account is possible in:
(a) Debit Card
(b) Credit Card
(c) Both (a) & (b)
(d) None of the above

ANS: Credit Card

39. The insured gets compensated for the actual loss amount or the policy amount,
whichever is less. This is related to:
(a) Principle of Contribution
(b) Principle of Indemnity
(c) Principle of Insurable Interest
(d) Principle of Subrogation

ANS: Principle of Indemnity

40. When the insured is compensated for the loss or damage to the property insured by
him/her, the right of ownership of such property passes on to the insurer. This is related to:
(a) Principle of Contribution
(b) Principle of Indemnity
(c) Principle of Insurable Interest
(d) Principle of Subrogation

ANS: Principle of Subrogation

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