Principles of Commerce

1st Year Commerce

Section “A” Multiple Choice Questions (MCQs)

Choose the correct answer for each from the given options:

1. Production is a part of:

a) Industry
b) Profession
c) Trade
d) Marketing
2. A minor partner has:
a) Unlimited liability
b) No liability at all
c) Limited liability
d) All of the above
3. Paper and electronic industry is a part of :
a) Light industry
b) Heavy industry
c) Analytical industry
d) Extracting industry
4. Business problems are generally related to:
a) Location
b) Labour
c) Infrastructure
d) Marketing
e) All of the above
5. For a business sources of finance include :
a) Equity
b) Borrowing
c) Retained earning
d) All of the above
e) None of the above
6. The memorandum of association consists of:
a) Two clauses
b) Three clauses
c) Four clauses
d) Five clauses
7. Retained earnings refer to:
a) Future profits
 b) Revenue of the firm
c) Accumulated profits over the years
d) All of the above
8. Capital is brought in by:
a) Banks
b) Shareholders
c) Creditors
d) Bondholders
9. One who participates in the conduct of partnership business is known as:
a) Sleeping partner
b) Minor partner
c) Nominal partner
d) Active partner
10. Tax saving is a unique advantage of a:
a) Company
b) Partnership
c) Proprietorship
d) None of these
11. The time period of short-term finance is:
a) 5-7 years
b) 4-5 years
c) 1-3 years
d) None of these
12. A company is run by:
a) Shareholders
b) Board of directors
c) Partners
d) Proprietors
e) Employees
13. Name clause is a part of:
a) Articles of association
b) Prospectus
c) Memorandum of association
14. The income distributed to the shareholders in a company is called:
a) Coupons
b) Interest
c) Profit
d) Dividend
15. The maximum number of shareholders on a public limited company is:
a) Ten
b) Twenty one
 c) Fifty
d) Unlimited
Section “B” Short Answer Questions
Attempt any seven questions from this section:
2.
i. Define the following terms: Commerce, Profession, Industry, and Trade.
ii. What factors are to be considered in starting a new business?
iii. What are the different forms of business organizations? Explain any two of them in
detail.
iv. Distinguish between Advertising and Publicity.
v. What are the various means of transport in Pakistan?
vi. Define the Prospectus of a joint stock company.
vii. Describe the clauses of Memorandum of association.
viii. Explain the sources of long-term finance.
ix. Explain the kinds of business letter.
x. What are the different types of advertising media?

Section “C” Detailed Answer Questions

Attempt any three questions from this section:

3.
i. Explain the procedure of incorporation of a joint stock company.
ii. Describe the procedure followed in exporting goods and list the documents used in
foreign trade
iii. Draft a circular letter to the potential customers to inform them about the new
product you have just introduced in the market and persuade them to buy your
product. Assume necessary details and particulars.