Test: Business Organizations- 6 - CA Foundation MCQ

The business only employs one person

The business is owned by one person

The firm has a single customer

There is a single firm in the industry.

Owners have limited liability

Shares can be sold to raise capital

Decisions and responsibilities can be shared

The owner has independence

Capital is limited to owner’s savings and bank loans

Decisions take too long to make

As they are government owned there is no profit motive

the owners may disagree.

All partners always have limited liability

Shares can be sold on the Stock Exchange

The business survives the death of the partners

The business has access to more capital than a sole trader.

Shares can be issued to raise capital.

Shares can be bought and sold on the Stock Exchange.

All owners of the business have limited liability.

The business continues after the death of shareholders.

It is owned by the government and is in the public sector.

It is owned by shareholders who can sell their shares in the Stock Exchange.

It is quick and easy to set up with few legal formalities.

Its accounts can be kept private and it receives little coverage in the business

They do not want to remain in the private sector

They want to gain the benefits of limited liability

They want to keep the annual accounts secret

They want to raise additional capital to expand the business.

There can be a loss of control by the original owners as additional shares are sold

Firms in the public sector are often less efficient

if the company were to fail the shareholders could lose all of their assets

workers have to be asked for their opinions before major decisions are taken.

They are owned and controlled by the workers.

They are owned by the directors but controlled by the shareholders.

The are owned by shareholders but controlled by directors.

They are owned and controlled by the government.

All co-operatives are only concerned with retailing.

Profits are shared equally amongst members.

They are owned by shareholders.

Workers have no say in decision-making.

It is always much cheaper than setting up a new business venture

The risks of failure are lower as it is buying a well known business idea.

The business can use its own name in advertisements

There is complete control over important decisions 

The business can expand more quickly

The franchisor owns all of the shops

The businesses buying the franchises are certain to be successful

The products sold in each shop will be different.

Expanding a business to all parts of the country

When the government buys all of the assets of a private sector business

When a private limited company applies to become a public limited company

Opening a new division of the business in another country to become a multinational.

the costs of a new project can be split between the companies involved

Manufacturing costs will be divided between the firms in the venture

Joint ventures between firms in different countries can create new market opportunities

Management of the joint venture will never lead to disagreements

In cases where monopolies are likely to occur, public corporations will be best for consumers

In declining industries, public corporations, with government subsidies, would attempt to avoid job losses

By aiming to maximise profits public corporations will always make money for the government

a public corporation television service could make non-profitable programmes.