SAHAY INSTITUTE

Chapter 4

Business Services

Multiple Choice Questions

0. 1. Which of the following is incorrect regarding the nature of services?

(A) Services are experiential in nature.

(B) Services have to be performed exclusively each time for different customers.
(C) Services can be stored for future use.
(D) Services involve simultaneous activity of production and consumption.

Q. 2. Goods are ..........… in nature and services and services are................in

nature

(A) Heterogeneous, Homogenous

(B) Homogenous, Heterogeneous
(C) Heterogeneous, Heterogeneous
(D) Homogeneous, Homogenous

Q. 3, In terms of tangibility , goods are ……… and services are .…………

(A) Tangible, Intangible

(B) Intangible, Tangible
(C) Tangible, Tangible
(D) Intangible, Intangible

Q.4.Services like banking, insurance, transportation, warehousing and

communication services belong to which of the following services
(A) Personal services
(B) Business services
(C) Social services
(D) None of the above

Q. 5. When service providers provide services like tourism, recreational services

or restaurants, then they are known to provide which of the following

(A) Social services

(B) Personal services
(C) Business services
(D) None of the above

Q.6. In order to meet the social goals like improving the standard of living for
weaker sections of the society, providing health care and hygienic conditions in
slum areas, etc. Which services are provided

(A) Personal services

(B) Business services
(C) Social services
(D) None of the above

Q. 7. Which of the following nature of services :

(A) Involvement
(B) Inseparability
(C) Indifference
(D) Intangibility

Q. 8. Which of the following is incorrect about e-banking:

(A) Helps to perform virtual

(B) Has emerged due to advances in information technology
(C) Services can be availed at any hour
(D) Has increased the load on the branches

Q. 9. Crossed cheques are encashable immediately at bank counters.

(A) True
(B) False
(C) Depends on the amount of the cheque
(D) Depends on the payee of the cheque

Q. 10. Electronic Fund Transfer (EFT) by banks can be done in which of the
following ways:

(A) ATM, PoS

(B) NEFT, RTGS
(C) EDI, CC
(D) None of these

Q.11. The person whose risk is insured is called .............and the firm which
insures the risk of loss is known as …………..

(A) Insured, Insurer

(B) Insurer, Insured
(C) Insurer, Assurance underwriter
(D) Assurance underwriter, Insurer

Q. 12. The principle of indemnity is not applicable to which of the following:

(A) Fire Insurance

(B) Life Insurance
(C) Marine Insurance
(D) All of these

Q. 13. Name the principle of insurance where it is the right of the insurer to
stand in the place of the insured after settlement of a claim as far as the right of
insured in respect of recovery from an alternative source is involved.

(A) Proximate Cause

(B) Insurable Interest
(C) Subrogation
(D) Contribution
Q.14. If reasonable care is not taken by the insured to minimize the loss or
damage to the insured property then the claim from the insurance company
may be lost. What is this principle known as?

(A) Mitigation
(C) Contribution
(B) Indemnity
(D) Utmost good faith

Q.15. Which of the following is a contract of utmost good faith:

(A) Marine Insurance

(B) Life Insurance
(C) Fire Insurance
(D) All of the above

Q.16. Which insurance policy should be taken by the shipping company in order
to insure the loss of freight in case cargo does not reach the destination
due to damage or loss in transit?

(A) Ship insurance

(B) Hull insurance
(C) Freight insurance
(D) Cargo insurance

Q.17. Duration of fire insurance policy generally does not exceed how many
years?

(A) 2years
(B) 1 year
(C) 3 years
(D) 5 years

Q.18. Match the following:

Column (A) Column (B)
1. Is the duty of the insured to take (i) Subrogation
responsible steps to minimize the loss
or damage to the insured property
2. Provide compensation only for such (ii) Causa Proxima
losses are caused by the perils which
are stated in the policy
3. The right of the insurer to stand in (iii) Mitigation
the place of insured after settlement of
the claim.

(A) 1. (iii), 2. (ii), 3. (i)

(B) 1. (i), 2. (ii), 3. (iii)
(C) 1. (ii), 2. (iii), 3. (i)
(D) 1. (ii), 2. (i), 3. (iii)

Q. 19. Which of the following is not a function of insurance?

(A) Risk sharing

(B) Assist in capital formation
(C) Lending of funds
(D) None of these

Q.20. Which of the following is not applicable in life

(A) Conditional contract (B) Unilateral contract

C) Indemnity contract (D) None of the above

Q.21. Which of the following is not applicable in life insurance contract?

Column I Column II
1. Intangibility (i) Participation of customer is required
2. Inconsistency (ii) Cannot be stored for future
3. Involvement (iii) One can only experience
4. Inventory (iv) Performed exclusively as per
customer’s choice
(A) 1. (ii), 2. (iii), 3. (i), 4. (iv)
(B) 1. (iv), 2. (i), 3. (iii), 4. (ii)
(C) 1. (iii), 2. (ii), 3. (iv), 4. (i)
(D) 1. (iii), 2. (iv), 3. (i), 4. (ii)

Q.22. Match the following concepts given in column I with suitable options
given in column II:

Column I Column II
1. Current Account (i) Combination of debit and deposit
account
2. Recurring Deposit Account (ii) Transaction on shares
3. Multiple Option Deposit Account (iii) Cumulative deposit scheme
4. DEMAT Account (iv) Overdraft Facility

(A) 1. (iii), 2. (iv), 3. (i), 4. (ii)

(B) 1. (iv), 2. (iii), 3. (i), 4. (ii)
(C) 1. (iii), 2. (iv), 3. (ii), 4. (i)
(D) 1. (ii), 2. (iv), 3. (i), 4. (iii)

Q.23. Match the following concepts given in Column I with the suitable options
given in Column II

Column I Column II
1. Payment made using UPI (i) Credit Card
2. Transfer money electronically from (ii) Cash on delivery
back account
3. Good bought on credit (iii) BHIM
4. Payment done after receiving the (iv) EEFT
commodity

(A) 1. (iii), 2. (ii), 3. (i), 4. (iv)

(B) 1. (iv), 2. (i), 3. (ii), 4. (iii)
(C) 1. (iii), 2. (iv), 3. (i), 4. (ii)
(D) 1. (ii), 2. (iii), 3. (iv), 4. (i)

Q.24. Which of the following runs on a contract of indemnity?

(A) Life Insurance
(B) Fire Insurance
(C) Marine Insurance
(D) None of the above

Q. 25. Suman has started an NGO to help poor kids in education. She has hired 2
more people to help her with the initiative.

Considering the above case, identify which type of business service is Suman
involved in?

(A) Personal Services

(B) Social Services
(C) Business Services
(D) None of the above

Q.26. Rahul owns a restaurant. One day, fire broke out at his restaurant and he
incurred a huge loss. Rahul was not much worried about it because he had the
loss covered as he had the insurance.

Considering the above case, identify the type of insurance Rahul had?

(A) Personal insurance

(B) Health insurance
(C) Fire insurance
(D) Marine insurance

Q.27. Arif works in a food delivery firm. His manager has asked him to obtain
signatures of the customers after delivering food at their home.

Identify the feature of service being indicated in the above case?

(A) Intangibility
(B) Inseparability
(C) Inconsistency
(D) Involvement
28. Simran wants to send money to her mother, who is living in a different state.
She only has an option to do a an electronic transfer

Considering the above, which of the following options Simran has?

(A) NEFT
(B) RTGS
(C) IMPS
(D) All of the above

Q. 29. Puneet wants to buy a new machine for his restaurant, He requested his
father to lend him ₹20,000 and he will add his ₹40,000 in the total amount that
is required to buy a machine.

Consider the case above and identify that Puneet is a ………..?

(A) Creditor (B) Debtor

(C) Both (A) and (B) (D) None of the above

0. 30. Shanti has deposited ₹1,00,000 in HDFC Bank after opening a savings
account. After one year opening the account, Shanti required a personal
loan of ₹2,00,000. She spoke to the bank manager and he agreed to give the
loan to her.

Identify which function of bank is being discussed here?

(A) Providing custodial services

(B) Granting loans
(C) Collection of deposits
(D) Issue of letter of credit