DEPARTMENT OF BBA

St. Josephs College (Autonomous)

Tiruchirappalli 620 002
Course BBA
Paper I
Sem IV 14UBU430208 Units
Code V
Title of the
BUSINESS LAW
Paper
Staff Name S.ARPUTHARAJ

UNIT - I
1.Law of contract is __________
a) Not the whole law of agreements b) The whole law of agreements
nor is it the whole law of
obligations
c) The whole law of obligations d) None of the above
Answer: c
2. A contract creates __________
a) Rights in personam b) Rights in rem
c) Only rights and no obligations d) Only obligations and no rights
Answer: b
3. An agreement is a voidable contract when it is __________
a) Enforceable if certain conditions are b) Enforceable by law of the option of
fulfilled the aggrieved party
c) Enforceable by both the parties d) Not enforceable at all.
Answer: b
4. An agreement not enforceable by law is said to be __________
a) Void b) Voidable
c) Valid d) Unenforceable (e) illegal
Answer: a
5. A contract __________
a) May be void as originally entered b) May become void subsequent to its
into formation
 c) Cannot become void under any d) May become void at the will of a
circumstances party
Answer: b
6. Which of the following result/results in an offer?
a) A declaration of intention b) An invitation to offer
c) An advertisement offering reward to d) An offer made in a joke
anyone who finds the lost dog of the
advertise
Answer: c
7. A specific offer can be accepted by __________
a) Any person b) Any friend of offerer
c) The person to whom it is made d) Any friend of offerer
Answer: c
8. A letter of acceptance sufficiently stamped and duly addressed is put into course of
transmission. There is __________
a) A contract voidable at the option of b) A contract voidable at the option of
acceptor offeror
c) No contract at all d) A valid contract
Answer: d
9. Acceptance may be removed by the acceptor __________
a) At any time b) Before the letter of acceptance
reaches the offerer
c) After the letter of acceptance d) Before the death of the acceptor
reaches the offerer
Answer: b
10. An advertisement to sell a thing by auction is __________
a) An offer b) An invitation to offer at all
c) A contract d) An obligation
Answer: b
11. Consideration must move at the desire of __________
a) The promisor b) The promise
c) Promisor or any third party d) Both the promise and the promisee
e) Any third party
Answer: a
12. Consideration __________
a) Must move from the promise b) May move from the promise or any
other person
c) May move from the third party d) May move from the promisor
Answer: b
13. Consideration __________
a) Must be adequate to the promise b) Need not be adequate to the promise
made made
c) Must be of reasonable value d) Must be of more value than the value
of promise made
Answer: b
14. Consideration must be something which the promisor __________
a) A already bound to do b) is not already bound to do
c) May voluntarily do d) Must not do
Answer: b
15. Compromise of dispute claims __________
a) It is good consideration for a b) Is not a good consideration for a
contract contract
c) Results in a void agreement d) Is not permitted by law
Answer: a
16. An agreement with or by minor is __________
a) Void b) Voidable at the option of the mind
c) Voidable at the option of the other d) Valid
party
Answer: a
17. On attaining the age of majority a minors agreement __________
a) Can be ratified by him b) Cannot be ratified by him
c) Becomes void d) Becomes valid
Answer: b
18. A minor, by misrepresenting his age, borrows some money __________
a) He can be sued for fraud b) He cannot be sued for fraud
c) He is liable to return the money d) None of the above
Answer: b
19. A minor enters into a contract for the purchase of certain necessaries. In such a case
 __________
a) He is not personally liable to pay b) He is liable to pay
c) His estate is liable to pay d) His guardian is liable to pay
Answer: c
20. A person usually of unsound mind, but occasionally of sound mind __________
a) He may enter into a contract when b) He may not make a contract even
he is of sound mind when he is of sound mind
c) He cannot enter into a contract at all d) None of the above
Answer: a
21. Where consent is caused by fraud or misrepresentation, the contract is __________
a) Voidable at the option of the b) Void
aggrieved party
c) Unenforceable d) Not affected in any manner
Answer: a
22. Where both the parties to an agreement are under a mistake as a matter of fact
essential to the agreement, the agreement is __________
a) Void b) Voidable
c) Illegal d) Not affected at all
Answer: a
23. Merely because a contract was caused by one of the parties to it being under a
mistake as to a matter of fact, it is not __________
a) Void b) Invoidable
c) Affected at all d) None of the above
Answer: a
24. Promises forming consideration for each other are known as __________
a) Independent promises b) Dependent promises
c) Reciprocal promises d) Mutual promises
Answer: c
25. Each party is a promisor and a promise in case of __________
a) Past consideration b) Present consideration
c) Every contract d) Reciprocal promises
Answer: d
26. When the promise refuses to accept performance from the promisor who offers to
perform, it is __________
 a) Attempted performance b) Vicarious performance
c) Tender d) Frustration of contract
Answer: a
27. Sale of goods for cash is an example of __________
a) Mutual and independent promises b) Mutual and depended promises
c) Mutual and concurrent promises d) Conditional and dependent promises
Answer: c
28. If a contract contains an undertaking to perform an impossibility, the contract is
__________
a) Void ab initio b) Void
c) Voidable at the option of the d) Illegal
plaintiff
Answer: a
29. An agreement to do an act impossible in itself __________
a) Is void b) Is voidable
c) Is void ab initio d) Becomes void when impossibility is
discovered
Answer: a
30. If a new contract is substituted in place of an existing contract, it is called
__________
a) Alteration b) Rescission
c) Novation d) Waiver (e) remission
Answer: c

UNIT - II
31. A nominal partner is __________
a) Liable for the debts of the firm b) Not liable for the debts of the firm
c) Liable for a nominal sum d) One whose liability is primary
Answer: a
32. As to important matters concerning the nature of the business of a firm, no change
may be effected __________
a) Without the consent of all the b) Without the consent of the majority
partners of the partners
c) At all d) None of these
 Answer: a
33. In the absence of any agreement, the partners are entitled to share profits
__________
a) Equally b) In the ratio of capital
c) In the ratio of time spent d) None of these
Answer: a
34. If a minor chooses to become a partner on attaining the age of majority, h will be
liable for the debts of the firm __________
a) From the date of his attaining b) From the date of his admission to the
majority benefits of the partnership
c) From the date of his election to d) From the date of his attaining
become a partner of the firm majority or election, whichever is
earlier
d) As determined by other partners
Answer: b
35. Public notice is not given on the death of a partner but the firm continues the
business. For the acts of the firm done after his death __________
a) The estate of the deceased partner is b) The estate of the deceased partner is
liable not liable
c) His legal representatives are d) None of these
personally liable
Answer: b
36. A firm in the course of its business receives money from a third party. One of the
partners misapplies it __________
a) The firm is liable to make good the b) The firm is not liable to make good
loss the loss
c) The defaulting partner alone is d) The defaulting partner is not liable
liable
Answer: a
37. The position of a minor partner is dealt with in the Indian Partnership Act, 1932 in
__________
a) Sec. 25 b) Sec. 29
c) Sec. 30 d) Sec. 35
Answer: c
38. Where a partner is entitled top interest on capital subscribed by him, such interest
 will be payable __________
a) Only one of profit b) Only out of capital
c) Out of profits or out of capital d) None of these
Answer: a
39. Where a partner retires, and the remaining partners carry on the business with the
firms property without any final settlement of accounts, the outgoing partner is
entitled __________
a) Interest at 6 percent per annum on b) Such share of the profits as may be
the amount due to him attributable to the use of his share of
the firm/s property
c) Wither of the above two at the d) Interest at the rate of 15 percent per
option of the outgoing partner annum on the amount due to him.
Answer: c
40. The liability of partners in a firm is __________
a) Limited b) Unlimited
c) d)
Answer: b and d
41. A change on the nature of business of a firm can be made if __________
a) The majority of the partners agree b) The senior partners agree
c) The financing partners agree d) The working partners agree
d) All the partners agree
Answer: e
42. In the absence of any agreement interest on advances by a partner is __________
a) Allowed at 15 percent b) Not allowed at all
c) Allowed at the market rate of d) Allowed at 6 percent
interest
e) Allowed at 10 percent
Answer: d
43. Dissolution of partnership mans __________
a) Completed breakdown of the b) Only a change in the relation of the
relation of partnership between all partners
the partners
c) Stopping the business of the firm for d) Stopping the business permanently
some time
 Answer: b
44. Where as partner has become of unsound mind, the Court may __________
a) Dissolve the firm on the petition of b) Not dissolve the firm
any partner
c) Order the other partners to continue d) None of these
the business
Answer: a
45. A, a partner in a firm, transfers the whole of his interest in the firm to a third party.
The Country may __________
a) Dissolve the firm at the instance of b) Dissolve the firm at the instance of A
any other partner
c) Dissolve the firm on its own d) Not dissolve the firm at the instance
discretion of any other partner
Answer: a
46. If the assets of a firm are insufficient to discharge the debts and liabilities of the firm,
the partners shall bear the deficiency __________
a) In the profit sharing ratio b) In the capital ratio
c) Equally d) As determined by the Court
Answer: a
47. _________ is a person employed to do any for another
a) The Agent b) The Principal
c) Third Parties d) A Servant
Answer: a
48. The Person for whom such act is alone, or who is so represent is called
a) The Agent b The Principal
c) Third Parties d A Servant
Answer: b
49. Agency depends on ___________ but on necessarily on _____________.
a) Contract; Agreement b) Agreement; Contract
c) Agent; Agreement d) Agent ; Contract
Answer: b
50. An Agent is merely a connecting link between the _________ and __________.
a) Agency; Agreement b) Principal ; Third Parties
c) Agreement; Principal d) Third Parties; Agreement
Answer: b
51. If a person who is not competent to contract is appointed
a) The principal b) An agent
 c) Third Parties d) Servant
Answer: a
52. ___________, that is by word of mouth as by an agreement in writing.
a) Implied Agreement b) Express Agreement
c) Implied Agency d) Agency by estoppels
Answer: b
53. ___________, that is by inference from the circumstances of the case.
a) Implied Agreement b) Express Agreement
c) Implied Agency d)
Answer: c
54. _____________, that is when a person, by his conduct, leads willfully another person to believe
that a certain person in his agent
a) Agency by Estoppel b) Agency by necessity
c) Agency by Express Agreement d) Agency by Implied
Answer: a
55. Agency by holding out is a brand of the
a) Agency by Estoppel b) Agency by necessity
c) Agency by Express Agreement d) Agency by Implied
Answer: a
56 A person may act on behalf of another without his knowledge (or) consent, is called
a) Agency by necessity b) Agency by Estoppel
c) Agency by Ratification d) Agency by operation of law
Answer: c
57. ___________ that is when a person acts in some emergency as agent for another without
requiring the consent of that other person.
a) Agency by necessity b) Agency by Estoppel
c) Agency by Ratification d) Agency by operation of law.
Answer: a
58. Who is appointed to perform a particular act?
a) General Agent b) Special Agent
c) Universal Agent d) Mercantile Agent
Answer: b
59. ____________ is one who has authority to do all acts connected with a particular trade.
a) General Agent b) Special Agent
c) Universal agent d) Mercantile agent
60.A universal Agent is one whose authority to act for the principal is
a) Limited b) Unlimited
c) Gradual d) None of these
Answer :b
 UNIT III
61. A bailee has __________
a) A right of particular lien over the b) A right of generation
goods bailed
c) A right of both particular and d) No lien at all over the goods bailed
general lien
Answer: c
62. The position of a finder of lost goods is that of a __________
a) Bailor b) Bailee
c) Surety d) Principal debtor
Answer: b
63. A gratuitous bailor is liable to the bailee for defects in the goods bailed
a) Even if he is not aware of them b) Only if he is aware of them
c) In all cases of loss d)
Answer: a
64. If the goods of the bailor get missed up with the like goods of the bailee by an Act of
God, the mixture belongs to the bailor and the bailee in proportion to their shares but
the cost of separation will have to be borne by __________
a) The bailee b) The bailor
c) Both of them in proportion to the d) Neither of them
value of their goods
Answer: c
65. A boilee fails to return the goods to the bailors direction. He takes reasonable care
of the goods but set the goods are lost. The loss will fall on __________
a) The bailee b) The bailor
c) On both of them d) Neither of them
Answer: a
66. In a sale, the property of goods __________
a) Is transferred to the buyer b) Is yet to be transferred to the buyer
c) May be transferred at a future time d) Is transferred when goods are
delivered to the buyer
e) May be transferred when the buyer
pays the price.
Answer: a
67. In a sale of the goods are destroyed, the loss falls on __________
a) The buyer b) The seller
c) Party on the buyer and party on the d) the subject matters of contractor of
seller sale
Answer:
68. The term property as used in the Sale of Goods Act 1930 means __________
a) Possession b) Ownership
c) Ownership and possession both d) The subject matter of contract of sale
Answer:
69. If a price is not determined by the parties in a contract of sale, the buyer is bound to
pay __________
a) The price demanded by the seller b) A reasonable price
c) In the process which the buyer thinks d) The price to the determined by a
is reasonable third independent person
Answer: a
70. The main object of a contract of sale is __________
a) Transfer of possession of goods b) Transfer of property in goods
c) Delivery of goods d) Payment of price
Answer: b
71. Risk follows ownership __________
a) Only when goods have been b) Only when price has been paid
delivered
c) Whether delivery has been made or d) Even when price has not been paid
not
Answer: c and d
72. In an agreement to sell, the seller can sue for price if __________
a) The goods have been delivered to the b) The goods has not been delivered to
buyer the buyer
c) There is a specific agreement d) None of the above
Answer: c
73. In a contract of sale, unless goods are ascertained, there is __________
a) A sale b) An agreement to sell
c) A void agreement d) On unenforceable agreement
Answer: b
74. Where there is an unconditional contract for the sale of specific goods in a
deliverable state, the property in the goods passes to the buyer when __________
a) The goods are delivered to the buyer b) The price is paid by the buyer
c) The contract is made d) The buyer accepts the goods
Answer: c
75. Where there is an unconditional contract for the sale of specific goods in a
deliverable state, the property in the goods passed to the buyer when __________
a) The goods are delivered to the buyer b) The price is paid by the buyer
c) The contract is made d) The buyer accepts the goods
Answer: b
76. If the contract is silent as to the party who is to appropriate the goods __________
a) The buyer is to appropriate b) Goods wale is to appropriate
c) The party who under the contract is d) Any party may appropriate
first to act is to appropriate
Answer: c
77. In a C.I.F. contract the property in goods passes from the seller to the buyer when the
__________
a) Goods are shipped b) Goods are received by the buyer
c) Contract is entered into d) Price is paid
Answer: a
78. Where there is no specific agreement as to place, the goods sold are to be delivered at
the place __________
a) At which they are at the time of sale b) Of the buyer
c) Desired by the buyer d) To be determined by the seller
e) To be determined by the buyer
Answer: a
79. Unless otherwise agreed, where goods are sent by the seller to the buyer by a route
involving sea transit, the seller __________
a) Must inform the buyer in time to get b) May insure the goods
the goods insured
c) Must insure the goods d) Need not inform the buyer
Answer: a
80. In a sale, the property in goods
a) Is transferred to the buyer b) is yet to be transferred to be buyer
 c) may be transferred at a future time d) is transferred when goods are delivered to
the buyer.
Answer: a

81. Bailment is concerned only with

a) offer b) Acceptance
c) Goods d) Promises
Answer: c
82. If the title of the bailor to the goods is defective means
a) the bailee is responsible for any loss b) the bailor is responsible for any loss
c) both of them are responsible for any loss d) None of these.
Answer: b
83. In all cases of bailment ______ is bound to take as much care of the goods bailed to him as a
man of ordinary prudence.
a) the bailee b) the bailor
c) the pawnor d) principal debtor
Answer: a
84. _______ means the right of a person to retain possession of some goods belonging to another until
some debt or claim of the person in possession is satisfied.
a) bailment b) lien
c) Pledge d) surety
Answer: b
85. -------- is a right to retain all the or any property of another until all the claims of holder is
satisfied
a) bailment b) Contract of indemnity
c) pledge d) General lien
Answer: d
86. The liability of a hotel-keeper or an inn keeper in respect of goods belonging to a
guest is that of __________of goods
a) Bailee b) bailor
c) Surety d) lien
Answer: a
87. The liability of a hotel keeper in india to his guest is regulated by the
a) Contract act b) Common law rule of england
c) Companies act d) Industrial act
Answer: a
88. The position of a finder of lost goods is that of a
a) Bailer b) bailee
 c) Surety d) Principal debtor
Answer: a
89. The gratuitous bailer is liable to the baliler for the defects in the goods bailwd
a) Even if he is not aware of them b) Only if he is aware of them
c) In all cases of loss d) In certain case of loss
Answer: c
90. A bailment involves the transfer of
a) Title to, but not possession of, b) Title to, but not possession of, real
personal property property
c) Possession of, but not title to, d) Possession of, but not title to, real
personal property property
Answer: a
UNIT IV
91. A contract of indemnity is a __________
a) Contingent contract b) Wagering contract
c) Quasi-contract d) Void agreement
Answer: a
92. The definition of a contract of indemnity as given in the Indian contract Act, 1872
includes __________
a) Express promises to indemnity b) Implied promises to indemnity
c) Wagering agreement d) Quasi-contract
Answer: a
93. S and P go into a shop. S says to the shopkeeper, C, Let P have the goods, and if
he does not pay you, I will, This is a __________
a) Contract of guarantee b) Contract of indemnity
c) Wagering agreement d) Quasi-contract
Answer: b
94. Any variance made without suretys consent in the terms of the contract between
the principal debtor and the creditor discharges the surety __________
a) As to transactions prior to b) As to transaction subsequent to
variance variance
c) As to all transactions d) From his liability under the
guarantee
Answer: d
95. A guarantee obtained by a creditor by keeping silence as to material circumstances
is __________
a) Valid b) Voidable
c) Unenforceable d) Invalid
Answer: a
96. Where there are co-sureties, a release by the creditor of one of them __________
a) Discharges the other co-sureties b) Does not discharge the other co-
sureties
c) Makes all the co-sureties d) Makes the contract of guarantee void
immediately liable
Answer: c
97. The right of subrogation in a contract of guarantee is available to the __________
a) Creditor b) Principal debtor
c) Surety d) Indemnified
Answer: b
98. The omission of the creditor to sue within the period of limitation __________
a) Discharges the surety b) Does not discharge the surety
c) Makes the contract of guarantee d) Makes the contract of guarantee
void illegal
Answer: b
99. The doctrine of caveat emptor applies __________
a) In case of implied conditions and b) When the buyer does not intimate
warranties the purpose to the seller and depends
upon his own skill and judgment
c) When goods are sold by sample d) When goods are sold by description
Answer: a
100. If a sale is by sample as well as by description, the implied condition is that the
goods shall correspond with __________
a) Sample b) Description
c) Both sample and description d) Either sample or description
Answer: c
101. In a sale, there is an implied condition on the part of the seller that he __________
a) Has a right to sell the goods b) Is in possession of the goods
c) Will have the right to sell d) Will acquire the goods
 Answer: a
102. A condition is a stipulation which is __________
a) essential to the main purpose of b) Not essential to the main purpose of
contract of sale contract of sale
c) Collateral to the main purpose of d) None of the above
contract of sale
Answer: a
103. In case of breach of a warranty, the buyer can __________
a) Repudiate the contract b) Claim damages only
c) Return the goods d) Refuse to pay the price
e) Refuse to take delivery of the
goods
Answer: b
104. In all cases of bailment _________ is bound to take as much care of the goods
bailed to him as a man of ordinary prudence
a) The bailee b) The bailor
c) The pawnor d) Principal debtor
Answer: a
105. A guarantee obtained by a creditor by keeping silence as to material circumstances
is
a) Valid b) voidable
c) unenforceable d) invalid
Answer: d
106. The right of subrogation in a contract of guarantee is available to the
a) creditor b) Principle debtor
c) Surety d) Indemnified
Answer: c
107. ________is a contract to perform the promise of a third person in case of the fault
a) Contract of indemnity b) Contract of guarantee
c) Contingent contract d) Quasi contract
Answer: b
108. Law of quasi contract is also known as
a) Law of contingent contract b) Law of indemnity
c) Law of guarantee d) Law of restitution
 Answer: d
109. _________ is not a contract at all
a) Contract of indemnity b) contract of guarantee
c) Quasi contract d) Contingent contract
Answer: a
110. _________ damages are allowed in case of breach of contract to marry or
dishonour of cheque by a banker wrongfully
a) vindictive b) nominal
c) specific d) Ordinary
Answer: a
111. Securing the specific performance for the negative terms of contract is a
a) Restitution mode b) Novation mode
c) Recission mode d) None of the above
Answer: c
112. The parallel concept of supervening impossibility is
a) Wagering agreement b) Contract of guarantee
c) Contract of indemnity d) Doctrine of frustration
Answer: d
113. When a new contract is substituted for an existing one between the same parties is
a) restitution b) Novation
c) Recission d) None of the above
Answer: b
114. _________takes place in case of death of insolvency of a party to the contract
a) Supervening impossibility b) Doctrine of frustration
c) Operation of law d) Novation
Answer: c
115. Forming the consideration or part of the consideration for each other is
a) Contract of guarantee b) Reciprocal promises
c) Contract of indeminity d) wagering agreement
Answer: b
116. It is only the___________ who can demand performance of the promise under a
contract
a) Indemnifier b) Promisor
c) promisee d) None of these
 Answer: c
117. Passing over from one person to another means
a) devolution b) Restitution
c) Novation d) rescission
Answer: a
118. The return of benefits received from plaintiff under a void contract is
a) Rescission b) Devolution
c) Restitution d) novation
Answer: c
119. An agreement made by an incompetent person is
a) A void agreement b) A voidable agreement
c) An illegal agreement d) None of these
Answer: a
120. Bailment is concerned only with
a) Offer b) Acceptance
c) Goods d) Promises
Answer: c
UNIT - V
121. A government company is one in which not less than __________ of the paid up
capital is held by government
a) 52% b) 51%
c) 100 % d)
Answer: b
122. A statutory meeting need not be held by __________
a) Public company b) Private company
c) Company limited by guarantee d) All of these
Answer: b
123. The members may remove a director by an ordinary resolution except the
following directors
a) Appointed by central government b) Elected by proportional
representation
c) Representing interest of debenture d)
holders
Answer:
124. A public corporation is created by
a) Ministry of Finance b) Ministry of Industry
c) Special Act of Parliament d)
Answer: c
125. In a highly geared company
a) Only ordinary capital is raised b) Only debentures are issued
c) Major part of finance is raised by d) Major part of finance is raised by
debentures equity capital
Answer: c
126. Which of the following carry voting right at the general meetings
a) Equity shares b) Preference shares
c) Debentures d) All of these
Answer: a
127. Interest dividend is payable even if there is a loss in the case of
a) Equity shares b) Preference shares
c) Debentures d) All of these
Answer: c
128. When dividend is declare, it must be paid within
a) 30 days b) 42 days
c) 45 days d) 60 days
Answer: b
129. Minutes of a meeting must be signed by
a) Secretary of the company b) Chairman of the meeting
c) Managing director of the d) Chairman and the secretary
company
Answer: d
130. Who can be appointed company secretary under the companies Act, 1956?
a) An individual b) A partnership firm
c) A body corporate d) Any of the above
Answer: a
131. In the case of a company having a share capital of Rs.20 lakhs. Who can be
appointed as a company secretary?
a) A member of the institute of b) A member of the institute of
company secretaries of India chartered accountants of India
 A member of the institute of cost A person holding a degree in law
and works accountants of India granted by a university
e) Any of these
Answer: e
132. A company secretary is appointed by
a) The Government b) Debenture holders
c) The Board of Directors d) Shareholders
Answer: c
133. Only a member of the institute of company secretaries of India can be appointed
as a secretary of the company having share capital of more than
a) 15 lakhs b) 25 lakhs
c) 50 lakhs d)
Answer: b
134. Statutory meeting is held
a) b) Every year within six months of the
Only once in the lifetime of the
en end of companys financial year
company of companys financial
year
c) Within three months of deposition d) Within three months of deposition
of the board of directors requisition by shareholders
representing 10% of voting rights.
Answer: a
135. Statutory meeting of the company must be held within
a) One month of obtaining the b) 3 months of obtaining the certificate
certificate to commence business to commerce business
c) 6 months of obtaining the d) 6 months of obtaining the certificate
certificate of incorporation to commence business
Answer: d
136. Notice of the statutory meeting to all the members of the company is required to
be sent at least
a) 14 days before the date of the b) 21 days before the date of the
meeting meeting
c) 30 days before the date of the d)
meeting
 Answer: b
137. A company is called an artificial person because
a) It does not have the shape of a b) It cannot be sued in the court of law
normal man
c) It is invisible and intangible d) It exists only in contemplation of law
Answer: d
138. Which of the following is the top administrative organ of the company
a) Shareholders b) Managing Director
c) General Manager d) Board of directors
Answer: d
139. The first directors of a public company are appointed by the
a) Public b) Shareholders
c) Promoters d) Government
Answer: c
140. In which of the following forms of business organization. Registration is legally
compulsory
a) Sole proprietorship b) Partnership
c) Joint stock company d) Co operative undertaking
Answer: c
141. Redeemable preference share can be
a) Cumulative preference shares b) Non cumulative preference shares
c) Participating preference shares d) Non participating preference shares
e) Any of these f) None of these
Answer: e
142. Preference shares are those which carry preferential right in respect of
a) Dividends b) Repayment of capital
c) Both dividend and repayment of d)
capital
Answer: c
143. Participating preference shares are those which participate
a) In the voting b) In the general meeting of the
company
c) In the management of the d) In the profiles over and above their
company fixed dividend
 e) All of these
Answer: d
144. A project which may not add to the existing profits should be financed by
a) Debentures b) Preference share capital
c) Equity capital d) Public deposits
Answer: c
145. To which of the following types of companies, debentures suit as a source of
finance?
a) Companies with fluctuating b) Companies with stable earnings
earnings
c) Companies which cannot earn a d) All of these
rate of profit higher than the rate
of interest payable on debentures.
Answer: b
146. The remuneration payable to a whole time director of the company should not
exceed
a) 5% of the Net profits b) 6% of the Net profits
c) 7% of the Net profits d) 10% of the Net Profits
Answer: a
147. In what order the following items are shown on the liability side of the balance
sheet
1. share capital 2. Debentures 3. Sundry creditors 4.Proposed dividends
a) 1,2,3,4 b) 1,3,2,4
c) 2,3,4,1 d) 1,4,2,3
Answer: a
148. If on a share of Rs.100 and called up capital is Rs.90. while the company reveived
Rs.80, the capital account should be credited with
a) Rs.100 b) Rs.90
c) Rs.80 d) Rs.70
Answer: b
149. Unclaimed dividend is shown in the balance sheet under the heading as
a) Current liabilities b) Unsecured Loans
c) Reserves and surplus d) None of these
Answer: a
150. When at an annual general meeting of a company no auditor is appointed or re-
appointed in that case
a) The central government appoints b) The Board of Director appoints a
a person to fill the vacancy person to fill the vacancy
c) The Managing Director of the d) None of the above can appoint a
Company appoints a person to fill person to fill that vacancy
that vacancy
Answer: a

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