Written by Sameer Ahmad GCMS

Business Law MCQs

BBA 4th Semester
Notes by Sir Abrar Bhatti

 Law is either private law or _________ law.

1) Public
2) Private
3) Local
4) Family
5) None of these

 A breach of contract can be of ___________ breach

1) Discharged
2) Illegal
3) Void
4) None of these

 How many parties are there to a Promissory note?

1) Two parties
2) One party
3) Four party
4) Three parties
5)None of these

 A minor can be an _____________?

1)Surety
2) Agent
3) Partner
4) All of these
5)None of these

 Public Law is divided into ________ categories?

1) Three
2) Four
3) Two
4) None of these
Written by Sameer Ahmad GCMS

 An agreement that is caused by fraud, misrepresentation &

coercion is _____?
1) Voidable
2) Partially Void
3) Valid
4) All of these
5) None of these

 The person which is represented as an agent ______?

1) Middleman
2) Owner
3) None of these
4) Principal

 Public law includes _______law?

1) Administrative
2) Constitution
3) Criminal
4) All of these
5) None of these

• Contingent goods belongs to _______ goods?

1) Existing
2) Future
3) Contingent
4) None of these

 Is voidable contract?
1) Partly valid agreement
2) An illegal agreement
3) All of these
4) None of these

 According to Contract Act, Select the true about the

“Contract”?
A. Legal Term
B. Binding agreement
C. Always in written
(A) B only
Written by Sameer Ahmad GCMS

(B) A and B only

(C) A, B and C

 A Contract can be signed between

(A) Individuals
(B) Legal Entities
(C) All of the above A and B
(D) None of these

 In general, Partnership entails which one of the following

liability?
(A) Unlimited Liability
(B) Limited Liability
(C) No Liability at all
(D) Both A and C

 Select the best of partnership that entails more legal benefits?

(A) Unlimited Liability Partnership
(B) Limited Liability Partnership
(C) Ordinary Partnership
(D) None of these

 Reciprocal represent the meaning of

A) One sided contracts
B) Trilateral contracts
C) Bilateral contracts
D) None of above

 …..is the promise which forms the consideration or part of the

consideration for each other’s.
A. Reciprocal promise
B. Conditional promise
C. Simple promise
D. None of above
Written by Sameer Ahmad GCMS

 A proposal may be revoked by different ways as are provided in

which one of the followings section of the Contract Act 1872.
A. 6
B. 7
C. 8
D. None of above

 How many ways for revocation of proposal, according to the

section 6 of the Contract Act, 1872
A. 2
B. 3
C. 4
D. None of above

 Which one of the following is the agreement that is not

enforceable by law is?
A. Valid agreement
B. Void agreement
C. Voidable agreement
D. None of above

 Which one of the following is the agreement that is enforceable

by law?
A. Contract
B. An agreement
C. Both (a) and (b)
D. None of above

 The Section 5 of the Contract Act, deals with which one of the
followings;
A. Communication of contract
B. Revocation of proposals and acceptances
C. Acceptance of contracts
D. None of above
Written by Sameer Ahmad GCMS

 Which one of the following is the agreement that is ceases to be

enforceable by law becomes void when it ceases to be
enforceable?
A. Valid contract
B. Void contract
C. Voidable contract
D. None of these

 Sameed proposes by letter to sell a house to Shahzeb. When the

Communication of the proposal in between Sameed and
Shahzeb is complete?
A) When Sameed make such proposal
B) When Shahzeb accepts the proposal
C) Both (A) and (B)
D) None of above

• According to the Sale of Goods Definition Section 2(7) the word

goods meanings are?
a) All type of properties
b) Property without actionable claims & money
c) All type of movable properties
d) All type of movable property, without actionable claims & money

 Consideration can be defined as…

a) Income
b) Benefit
c) Profit
d) All of these

 Which of the following debentures is paid to a certificate holder

is ______?
a) secured
b) Bearer
c) registered
d) None of these

 Law of relationship in business person & middleman is the?

Written by Sameer Ahmad GCMS

a) Agency
b) business
c) surety
d) legacy

 A private company can be established by how many persons?

a) Four
b) Three
c) Two
d) All of these

 In a public company, minimum numbers of Directors are

_______?
a) 3
b) 8
c) 2
d) All of the above

 According to contract ______ person not usually get any

response…
a) Principle
b) Surety
c) Agent
d) None of these

 The notice of general meeting to non-profitable companies are

given in?
a) 15 days
b) 22 days
c) 14 days
d) 33 days

 G & H contract to marry each other. Now, suppose death of H

occurs, the contract is…
a) Voidable
b) Valid
c) None of these
d) Void
Written by Sameer Ahmad GCMS

 The act which is done on behalf of the principal is?

a) Intention
b) Rule
c) Consideration
d) All of the above
 The contract of sale made by?
a) May be implied from the conduct of the parties
b) In writing
c) By word of mouth
d) All of the above
e) None of these

 The contract which is breach can be?

a) Anticipatory
b) Void
c) Actual
d) B and C
e) None of these

 The person who is representator of agent is…..

a) Principle
b) Middle man
c) Principal
d) Owner
e) None of these

 The act of agent on behalf of principal is?

a) Intention
b) Consideration
c) Rule
d) Policy
e) None of these

 The Ratification done by an agent is for…..

a) Not a part of contract
b) Part of the contract
c) Whole contract
d) A and B
e) None of these
Written by Sameer Ahmad GCMS

 When agency is ratified it must communicated with…..

a) Principal
b) Third party
c) Agent
d) Owner
e) All of the above

 The goods which are contingent is part of……

a) Unascertained
b) Ascertained
c) Future
d) Existing
e) Previous

 In sale contract , the parties make statement which is known

as…..
a) Promises
b) Stipulations
c) Agreement
d) Contract
e) None of these

 The condition on title is an example of…..

a) Express condition
b) Express warranty
c) Implied warranty
d) Implied condition
e) None of these

 The condition for quality or fitness is ?

a) Implied warranty
b) Implied condition
c) Express warranty
d) Express condition
e)All of the above

 The condition for Merchantable quality is?

a) Implied warranty
b) Express condition
c) Express warranty
d) Implied condition
Written by Sameer Ahmad GCMS

e) None of these

 The warranty of quiet possession is?

a) Express warranty
b) Express condition
c) Implied condition
d) Implied warranty
e)All of the above

 In “Promissory note” and a “bill of exchange” how many parties

involved?
a) Two parties to a “Promissory note three to a bill of exchange”
b) One party to a “Promissory note” two to a “bill of exchange”
c) Four parties to a “Promissory note” three to a “bill of exchange
d) Three parties to a “Promissory note” four to a “bill of exchange”
e) None of these

 Type of law Public law_______?

a) Private
b) Local
c) Family
d) All of the above
e) none of these

 The rights of minor in the firm is…..

a) Not Access to and inspect and copy any of the accounts of the firm
b) Access to and inspect and copy any of the accounts of the firm
c) Admitted to the benefits of partnership
d) None of these

How many classes Public law is divided?

 a) Three
b) Two
c) Four
d) Five
e) None of these

 Maximum number of persons in Public company……

a) 9 persons
b) 11 persons
c) 2 persons
Written by Sameer Ahmad GCMS

d) 7 persons
e) All of the above

 In Public law which law includes?

a) Administrative
b) Criminal
c) Constitution
d) None of these
e) All of these

 Maximum number of persons in Private company……

a) 9 persons
b) 10 persons
c) 2 persons
d) 7 persons
e) None of these

 Criminal Law is basically ?

a) Private law
b) Public law
c) Local law
d) Family law
e) A and B

 A contract which is known as void ?

a) Valid agreement
b) Partly valid agreement
c) Illegal agreement
d) A and c
d) None of these

 A private company cannot have more the ?

a) 50 members
b) 25 members
c) 12 members
d) 2 members
e) 30 members

 A agrees with B to sell “200 pairs of shoes” this agreement is…..

a) Voidable
b) Valid
Written by Sameer Ahmad GCMS

c) Void
d) Partially valid
e) None of these

 The agreement which caused by fraud, coercion and

misrepresentation is called…..
a) Void
b) Voidable
c) Partially void
d) Valid
e) None of these

 A company is established by:

a) Directors
b) Government
c) Promoters
d) Owners
e) A and B
• The Ordinary shares are also named as:
a) Founder Shares
b) Equity Shares
c) Preference Shares
d) Deferred Shares
e) None of the above

• The Company which is maintained by the group of persons is

called:
a) Group of members
b) Team of shareholders
c) Board of directors
d) A and B
e) All of the above

• The power of the company managed by:

a) Memorandum of association
b) Prospectus
Written by Sameer Ahmad GCMS

c) Shareholders
d) Articles of association
e) None of the above

• Debenture holders are also called:

a) Owner
b) Customer
c) Company
d) Debentures
e) Creditors

• In issue of shares normally discount should not exceed then?

a) 8%
b) 2%
c) 10%
d) 50%
e) All of the above

• On the account of company audit is?

a) Restricted
b) As per requirement
c) Optional
d) Compulsory
e) A and B

• The holder of debenture is called…..

a) Suppliers
b) Directors
c) C) Owners
d) General secretary
e) Creditor
• The invitation to the public for the purchase of shares privately
is called?
Written by Sameer Ahmad GCMS

a) Audit report
b) Articles of association
c) Prospectus
d) Articles of association
e) Memorandum

• In Public limited company how many minium number of

members are there?
a) 50
b) 20
c) 17
d) 7
e) All of the above

• In Private limited company how many maximum number of

members are there?
a) 50
b) 30
c) 11
d) Unlimited
e) Limited

• In the balance sheet discount on shares are write in…..

a) Liability
b) Paid up capital
c) Asset
d) Income
e) None of the above

• Interest in debited to the asset account….

1. Insurance policy method
2. Depletion method
3. Depreciation fund method
4. Annuity Method
Written by Sameer Ahmad GCMS

5. Replacement method

• For the replacement of asset, the provision method is………….

1. Sinking fund method
2. Annuity method
3. Written down value method
4. Insurance policy method
5. Depletion method

• The profit on depreciation policy is…

a) Profit and loss account
b) Asset account
c) Depreciation fund account
d) Investment account
e) none of these

• The asset always appears in the provision method of

depreciation is ….
a) Market price
b) Global price
c) Scrap value
d) Cost price
e) All of the above

• The net charge on the profit and loss account is same as ….

a) Depreciation fund method
b) Annuity method
c) Both A and B
d) None of these
Written by Sameer Ahmad GCMS

• The depreciation fund method is usually known as…….

a) Annuity method
b) Sinking fund method
c) Depreciation method
d) Sum of year digits method
e) All of the above
• The annual charge for depreciation will be debited under annuity
method is.........
a) Interest account
b) Asset account
c) Depreciation account
d) All of the above

• The consignor is the:

a) An agent
b) Creditor of Consignee
c) Debtor of Consignee
d) Principle
e) All of the above

• Normal losses are arising due to?

a) Contingent
b) Natural causes
c) Avoidable factory
d) Breaking in bulk
e) Unavoidable factory

• The acceptance of Bill of exchange in Consignee book is debited

to?
a) Consignment account
b) Consignor account
c) Trading account
d) Profit and loss account
e) Income and Expenditure account
Written by Sameer Ahmad GCMS

• The term of account and sales account are by Nature:

a) Equal
b) Same
c) Different
d) Valuable
e) All of the above

• The Consignment stock appears in the balance sheet of :

a) Consignee
b) Consignor
c) both A and B
d) None of the above
e) All of the above

• Which process is follwed for adjusting invoice price to the cost

price?
a) Invoicing
b) Costing
c) Loading
d) Unloading
e) None of the above

• The consignee is the?

a) Agent
b) Buyer
c) Principal
d) Seller
e) None of the above

• Account sale is submitted by the?

a) Principal to his agent
b) Debtor to the creditor
c) Consignee
d) Cosigner
e) None of the above

• In Journal book the consignment is prepared by?

a) Consignee
b) Consignor
Written by Sameer Ahmad GCMS

c) Customer
d) Debtor
e) All of the above

• The nature of Consignee account is?

a) Real
b) Nominal
c) Personal
d) All of the above
e) None of the Above

• Where abnormal losses are credited in the book of consignor?

a) Consignee account
b) Trading account
c) Trading profit and loss account
d) Consignment account
e) c and d

• In ordinary partnership business how many partners are:

1. Not more the 2 partners
2. Not more than 5 partners
3. Not more the 50 partners
4. Not more the 20 partners
5. Any Number of partners
• The transaction of Expenditure and Income account is recorded
in….
a) Revenue and Capital Nature of the accounting year
b) Income
c) Revenue nature of accounting year
d) Capital nature of the previous year
e) All the above
• The goodwill is distributed to an old partner in……
a) New ratio
b) Sacrifice ratio
c) Old ratio
Written by Sameer Ahmad GCMS

d) A and B
e) None of these
• The depreciation under the diminishing balance method is…..
a) Constant every year
b) Changed every year
c) Increase every year
d) Decrease every year
e) All the above
• How capital is obtained…….
a) Creditors account
b) Statement of affairs
c) Debtors account
d) Cash account
e) None of these
• The prospectus for shares can be issued only….
a) Private company
b) Public company
c) Chartered company
d) Shareholders
e) All of the above
• The non-trading account is prepared in…
a) Profit and loss account
b) Expenditure and Income account
c) Manufacturing account
d) Trading account
e) All of the above
• Opening balance is managed by preparing by…………….
Written by Sameer Ahmad GCMS

a) Opening statement if affairs’

b) Creditors
c) Debtors
d) Cash book
e) Surplus
• Single entry system is usually prepared by….
a) Partnership
b) Government
c) Company
d) Consignor
e) Consignee
• Deprecation is occurred due to….
a) Fall in the value of money
b) To show true financial position
c) Fall in the market value
d) Physical wear and tear of on asset
e) None of these
• A company is formed by…..
a) Directors
b) Owners
c) Promoters
d) Private
e) Public
• The Debenture holders are…….
a) Customers
b) Debtors
c) Owners
Written by Sameer Ahmad GCMS

d) Creditors
e) All of the above
• Provision is created for………….
a) Increase working capital
b) Un-known liability
c) Known liability
d) A and B
e) All of the above
• Funds invested in fixed assets are known as…
a) Restricted funds
b) Annuity funds
c) Property Funds
d) a & b
• Deficit is transferred into…
a) Accumulated profit
b) Capital fund
c) Balance sheet
d) Trading account
• Expenditure and income account is always records in?
a) Balance sheet
b) Petty cash book
c) Trial balance
d) All of the above
• If income is calculated more than expenditure then?
a) Deficit and surplus
b) Deficit
c) surplus
Written by Sameer Ahmad GCMS

d) All of the above

• Which thing is not preparing in single entry system?
a) Trial balance
b) Trading account
c) Profit and loss account
d) Balance sheet
• On which fund the third party restriction exist?
a) Property fund
b) Unrestricted fund
c) Endowment fund
d) Restricted fund
• Single entry system is usually used by?
a) Government
b) Shareholders
c) Partners
d) None of the above
• In Payment and Receipt account which items are not usually
adopted?
a) Expenses paid for previous year
b) Donation received during the year
c) Loss on sale of old furniture
d) Entrance fees paid by new members
• The single entry system is defined as?
a) Unscientific and incomplete
b) incomplete but scientific
c) complete but unscientific
d) a & b
• The subscription which is received in advance is called?
Written by Sameer Ahmad GCMS

a) Income
b) Expense
c) Asset
d) Liability
• In which of the following item stock turn rate is low?
a) Grocery
b) Agent
c) Jeweler
d) All of the above
• If sport material is sale then in which form it is treated?
a) Expense
b) Liability
c) Asset
d) Income set 9